Sunday, May 31, 2015

Analysis of Cez 2015


Cez, a Czech electricity producer

Company: Cez

ISIN CZ0005112300 | WKN 887832

Business: A Czech electricity producer and distributor. They offer heat and gas to consumers and are active with telecommunications, informatics, nuclear research, planning, construction and maintenance of energy facilities, mining raw materials, and processing energy by-products.

Active: Czech Republic, Poland, Bulgaria, Hungary, Slovakia, Romania and in Turkey.

P/E: 15.2


Here you can find the previous analysis of Cez 2014.

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

The P/E of Cez is a bit too high with 15.2 but the P/B is good with 1.3 and we get still a buy signal from Graham. The earnings to sales are looking very good with 11% but the ROE is not very good with only 8.4%. The book to debt ratio is ok with 0.7 for being a large electricity provider
In the last five years they have had a yearly revenue growth rate of 0.2% which is very poor and this gives us a motivated P/E of 8 to 11 which means that Cez is overvalued on the stock market today.
They pay a very nice dividend of 6.3% however it correspond to 96% of their earnings so they better start pushing up those earnings or it is time to cut the dividend!

Conclusion: Graham says yes to Cez also today but I do not. They had a bad year which is part of the reason for all the high figures such as the P/E, the low ROE as well as the very high yield to earnings. As a shareholder I will remain with my holding but if I were not then I would have waited until I would have seen an improvement in their results before even deciding to do something.

If this analysis is outdated then you can request a new one.

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