Thursday 7 May 2015

Analysis of Gazprom 2015

Gazprom, a Russian gas and energy company

Company: Gazprom

ISIN US3682872078 | WKN 903276

Business: A Russian energy company that are sitting on 18 % of the worlds calculated gas reserves and 72% of Russia's gas reserves. They are active within more or less every field that has to do with gas so to just mention a few: Geological Exploration, Gas Production, Gas Transportation, Storage of Gas, Processing & Sales of Gas as well as Marketing of Heat and Electric Power.  

Active: 30 countries around Russia mainly to which gas pipelines could be built.

P/E: 23.1 (P/E5: 3.7)

Here you can find the previous analysis of Gazprom
This company was analysed due to a request posted on the Analysis Requests page. 

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

The P/E of Gazprom is far too high due to a poor year with 23.1 (the P/E5 still looks good though!) and the P/B is excellent which then in the end gives us a clear buy from Graham. The earnings to sales have dropped to a disappointing level with only 3% and the ROE is also awful with 1.6%. The book to debt ratio of 1.9 is great!
In the last five years they have had an excellent yearly revenue growth of 9.2% which gives us a motivated P/E of 22 to 27 which means that Gazprom is fairly valued today in spite of the poor result for 2014.
They pay an excellent dividend of 4.7% which does however correspond to 108% of their earnings so they better go back to more normalized earnings in the future!

Conclusion: Graham is still saying yes to Gazprom and I am also not negative to it. It did however get kicked out from the Stocks of Interest list since the P/E is now too high. Still, the P/B is excellent and if one believes that gas prices will once again increase and one does not fear Russia then it could still be a good moment to step in as shareholder in Gazprom. Personally I do not like that the shares are only offered as ADR over the US and not as GDR which would be better for me sitting in Europe.

If this analysis is outdated then you can request a new one.

No comments: