Company:
Rhön-Klinikum AG
Business: A German healthcare company that are currently running 48 hospitals with 43,000 employees, 17,000 beds and last year they treated 2.5 million patients (which means they received a revenue around 1,200 € per treated patient and 35 € in profit. I should try to remember to check this for other healthcare companies in the future).
Active: Only in Germany.
P/E: 33.9
The P/E of Rhön-Klinikum is laughable with 33.9 and the P/B is a bit too high with 1.9 which gives a very clear no from Grahams formula. The earnings to sales is down at 3% which feels low but I have no real references to lean on. The ROE is also really bad with not even 6%. The book to debt ratio is however fully ok with 1. They have expanded strongly lately both with building new hospitals as well as taken over hospitals so the yearly growth has been excellent with 6.1% which then gives us a motivated P/E of around 16 to 20. The market is therefore highly overvaluing Rhön-Klinikum at the moment. They pay a tiny dividend of 1.1% which already represents almost 39% of their earnings so unless they significantly push up the earnings we will probably not see a big difference to the dividend payment. The comment was due to that they had more short debt than what they had available in cash in 2012.
Conclusion:
Grahams formula as well as I say no to this one. As you know I kind of like the hospital, healthcare and eldercare as an investment for the future but in this case the company is already far too expensive for being of any interest.
If this analysis is outdated then you can request a new one.
No comments:
Post a Comment