Tuesday, April 28, 2015

Analysis of Daimler 2015


Daimler, a German automotive company

Company: Daimler

ISIN DE0007100000 | WKN 710000 

Business: A German automotive company. They have several brands and to list a few: Mercedes-Benz Cars (Mercedes-Benz and Smart), Daimler Trucks (MB, Freightliner, Fuso etc.), Mercedes-Benz Vans (MB and Freightliner), Daimler Buses (MB and Setra) and then they have Daimler Financial Services (leasing). All the brands can be found here. They also have the car rental service called Car2Go and it costs 29 ct/min.

Active: World wide in over 200 countries.

P/E: 13.2

Here you can find the previous analysis of Daimler 2014

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

The P/E of Daimler is ok with 13.2 and also the P/B is ok with 2.2 but still it goes outside of Grahams comfort zone. The earnings to sales looks reasonable with 5% and the ROE is fully ok with 16.3%. The book to debt ratio is however low with 0.3.
In the last five years they have had an excellent yearly revenue growth of 5.8% which gives us a motivated P/E of 16 to 20 which means that Daimler is today undervalued by the market.
The focus very much on research and in my opinion a bit too much since it is up at 65% of their earnings.
They pay a so, so dividend of 2.8% which represents 38% of their earnings so it should be possible for them to keep it up unless there are any dramatic changes happening.

Conclusion: Graham says no and so do I. All the values are indeed entering into a mediocre level of being ok but there is nothing that tickles me. Owning Daimler for the long run I do however consider a great idea but personally I will not step in at this share price level.

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