Thursday, April 12, 2018

Analysis of DB 2018


Logo of DB 2018


Company: Deutsche Bank 

ISIN DE0005140008 | WKN 514000

Business: A German investment bank. They have five products and services pillars: Private & Business Clients (classical banking services: accounts, deposits, loans, pensions products), Asset & Wealth Management (helps institutions and wealthy individuals to increase their wealth across all asset classes), Corporate Banking & Security (sales, trading etc of financial products such as equity, bonds etc. as well as dealing with mergers and acquisitions), Global Transaction Banking (world wide banking services and products for corporate and institutions) and finally None-Core Operations Unit (dirty laundry).

Active: in 70 countries world wide.

P/E: -31.5

Here you can find the previous analysis of DB 2017.

Contrarian analysis of DB 2018 with P/E, P/B, ROE as well as dividend

The P/E for DB is negative with -31.5, which is horrible, while the P/B is very good with 0.4. The end result is still the same because Graham says no to this one. Earnings to sales and the ROE is negative and being a bank the book to debt ratio is low with only 0.04.
In the last five years they have had a yearly decrease in interest income by -0.8% and this gives us a motivated P/E of around 8 which means that DB is most likely overvalued by the market.
They pay a meaningless dividend of 1%, please stop it, which correspond to a negative value due to their losses.

Conclusion: Graham says no and also I have to say no. Not because the bank, based on P/B, looks expensive but simply due to that I cannot plough any more money into DB. I will remain a grumpy shareholder.

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