Monday, April 18, 2016

Analysis of BMW 2016


BMW, a German automotive company

Company: BMW 

ISIN DE0005190003 | WKN 519000 

Business: A German car and motorcycle producer. They have three segments that they speak of: Cars (with BMW, Mini and Rolls-Royce), Motorcycles (with the BMW brand) and finally Financial Services. In cooperation with Sixth they also have DriveNow which is a car sharing system. 

Active: World wide sales of their cars and motorcycles. 

P/E: 8.1


Here you can find the previous analysis of BMW 2015

contrarian values of P/e, P/B, ROE as well as dividend for BMW

The P/E of BMW is silly low with 8.1 and so is the P/B with only 1.2 which gives a very, very clear buy signal from Graham. The earnings to sales look ok with 7% and the ROE is also ok with almost 15%. The book to debt ratio is down at 0.3 which I find low but all these companies have financing business which explains the low figure.
In the last five years they have had an excellent yearly revenue growth rate of 6% which gives us a motivated P/E of 17 to 20 which means that BMW is undervalued by the market.
Additionally they pay an excellent dividend of 4.1% which only corresponds to 33% of their earnings which should hopefully mean that they can keep it up.

Conclusion: Graham says yes to BMW and so do I.. To be honest I find it silly that one can buy such excellent car brands such as BMW, Mini and Rolls-Royce at a P/E of 8! Insane! So The P/E, P/B and dividend are all excellent and the ROE is fully acceptable. Additionally BMW have strong owners with skin in the game. Same goes here as for Allianz... I can not buy any more stocks in Germany but BMW would be worth to do the check list on to see if it would pass.

If this analysis is outdated then you can request a new one.

No comments: