Saturday, May 2, 2015

Analysis of Deutsche Post 2015


Deutsche Post, a German logistics company

Company: Deutsche Post

ISIN DE0005552004 | WKN 555200

Business: A German global mail and logistics company. They still have four divisions: Post-eCommerce-Parcel (domestic mail services and all the parcels coming from the growing e-commerce business), Express (transportation of urgent documents and goods from door to door), Global Forwarding & Freight (the air, ocean and road freight transport) and finally Supply Chain (warehouses, logistics services and value added services). 

Active: World wide in over 220 countries.

P/E: 17.9

Here you can find the previous analysis of Deutsche Post 2014

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

The P/E of Deutsche Post is too high for me with 17.9 and the P/B is also high with 4.0 which gives an overall no go from Graham. The earnings to sales I find ok at 4% and the ROE is excellent with 22%! The book to debt ratio I am less impressed with since it is 0.3 and one need to ask if they are pushing up their ROE via debt and if yes then why?
In the last five years they have had a yearly revenue growth of 1.9% which is not very good and this then gives us a motivated P/E of 9 to 13 which means that Deutsche Post is highly overvalued on the market today.
They pay an ok dividend in the size of 2.9% which correspond to 52% of their earnings so it starts to be time for them to push up their earnings.

Conclusion: Graham says no and so do I due to that Deutsche Post has a too high P/E, too high P/B and I consider the ROE, even to I like the high value, to be pushed up via debt. The dividend is ok but that is not enough for making me interested in Deutsche Post today.

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