Friday 16 March 2018

Analysis of DBAG 2018

DBAG, logo, 2018


Business: A German private equity company. Their focus lies with the management buy out of small and medium sized companies that have excellent products. To see their full company portfolio then please click here. They divested six companies and invested in five new ones during 2017.

Active: Germany, and surroundings. Companies are sometimes more globally oriented. 

P/E: 6.9

Here you can find the previous analysis of DBAG 2017.

Contrarian analysis of DBAG with P/E, P/B, ROE and dividend

The P/E is excellent with 6.9 and the P/B is also great which leaves us with a clear buy signal from Graham. The earnings to sales are artificial due to the nature of their business and reporting but the ROE is great with 20.3%. Since they have pretty much no debt also the book to debt ratio is excellent with almost 16.
In the last five years they have had an amazing yearly growth rate which, to be honest, comes from 2017 being an insanely profitable year which therefore have given them a value of almost 22%. This then gives us a motivated P/E value of around 20.
They pay out an acceptable dividend in the size of 3.3% which only corresponds to 23% of their earnings so there is room for them to increase.

Conclusion: Graham says yes and so do I. The P/E is excellent as is the P/E and ROE. The dividends is fully acceptable but one must keep in mind that 2017 was an extraordinary year and having more "normal" earnings in mind then the P/E would have been doubled and the investment benefit is no longer as clear. I will keep my shares but I will not invest any more money at this moment into DBAG.

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