Sunday, May 24, 2015

Analysis of Siemens 2015


Siemens, a German electrical engineering company

Company: Siemens

ISIN DE0007236101 | WKN 723610 

Business: A German electrical engineering company. They have now left their sectors and are now divided into divisions and those are: Power & Gas, Wind Power & Renewables, Power Generation Services, Energy Management, Building Technologies, Mobility, Digital Factory, Process Industries & Drives, Healthcare and finally Financial Services.

Active: World wide in over 190 countries.

P/E: 16.1


Here you can find the previous analysis of Siemens 2014

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

The P/E of Siemens is a little bit on the high side with 16.1 and also the P/B is a little bit too high with 2.8 and overall Graham says no to Siemens. The earnings to sales are looking very good with 7% and the ROE is great with 17%. The book to debt is not so good with a ratio of 0.4.
In the last five years they have had a bad negative yearly growth rate of -1.1% which gives us a motivated P/E of 8 to 10 which means that Siemens is overvalued on the market today.
They pay an acceptable dividend of 3.4% which on the other hand correspond to 54% of their earnings so they need to improve their earnings to keep this up!

Conclusion: Graham says no and so do I. At first I thought that one can get Siemens at a still fair price because the P/E and P/B is semi ok, the ROE is great and the dividend is also fully ok but I do not know. Siemens is one, of many DAX companies, that carry a huge pension debt in their books. I therefore want to see Siemens even cheaper before I will decide to go for it.

If this analysis is outdated then you can request a new one.

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