Thursday, April 23, 2015

Analysis of Beiersdorf 2015


Beiersdorf, a German consumer products company

Company: Beiersdorf

ISIN DE0005200000 | WKN 520000 

Business: A German consumer products company. They have three segments that are represented by three brands: Mass Market (Nivea), Dermocosmetics (Eucerin) and the third one is Premium Segment (La Prairie). They do however also produce Tesa film and Hansaplast.

Active: World wide in over 200 countries

P/E: 38.5

Here you can find the previous analysis of Beiersdorf 2014

contrarian values of P/E, P/B, ROE as well as dividend for Beiersdorf

The P/E seem to be stuck at crazy high for Beiersdorf and it is now at 38.5 and the P/B is also high with 5.6 which gives us also this year a clear no go from Graham. The earnings to sales is acceptable with 8% and the ROE is ok but should be improved with 14.5%. The book to debt ratio is at 1.4 which is very good.
In the last five years they have managed to have a yearly revenue growth of 0.3% which is extremely bad! This then gives us a motivated P/E of 8 to 10 which means that Beiersdorf is highly overvalued on the market.
They try to stay ahead of the game and perform research that correspond to 32% of their earnings which I find to be fully reasonable.
They pay a useless dividend of 0.9% (stuck at 0.7 € for the last six years!) which correspond to 33% of their earnings so they should at least be able to keep it at this level also next year!

Conclusion: Graham says no and so do I. No growth, almost no dividends and a crazy high P/E and P/B. I am each year amazed that it remains at these high P/E levels. The free float is on the one side only 40% and by the look of it also those 40% keep the shares for eternity so the share price remains insane high.

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