Analysis of Dürr

Company: Dürr

Business: A German mainly automobile supplier of products, systems and services. They are divided into four division: Paint and Assembly Systems (the entire systems for a coatings assembly line for not only automobiles but also airplanes), Application Technology (high tech automated painting of 3D objects), Measuring and Process Systems (filling equipment for household appliances, also more regular assembly line products for the automobile business, includes also cleaning and filtration systems so a big and broad division) and Clean Technology Systems (energy efficiency and air cleaning systems).

Active: They are active in 23 countries world wide.

P/E: 10.6

The P/E for Dürr is excellent with 10.6 but the P/B is too high for me with 2.7 which then also leads to that it is just outside of Grahams comfort zone. The earnings to sales is at 4% so nothing spectacular but the ROE however is extra-ordinary with 25.3%. The book to debt is not so nice with a ratio of 0.3. In the last five years they have had a yearly growth of 8.4% which is great and it gives us a motivated P/E of 22 to 25. They try to stay on top of things so they spend around 35% of their earnings on research. They do indeed also pay a nice dividend of 3.4% which represents only 36% of their earnings so it should be ok.

Conclusion: Great P/E, excellent ROE, great growth and a fully acceptable dividend. Downside is that P/B is far too high and the debt to book is also of less interest to me. So many good things with Dürr but I really do not like the debt so I will not go for it but it seems to be a very interesting company and I understand if people that focus more on ROE and P/E will go for it! Back in 2009/2010 it was down below 10 € per share and I would have been a happy bunny if I would have bought it back then but on the other hand... one could have bought anything and still have had an excellent development.

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