Thursday 6 February 2014

Analysis of Deutsche Beteiligungs AG (DBAG) 2014

A German investment company

Company: Deutsche Beteiligungs AG

Business: A German investment company that invest in successful mittelstand (small and medium sized) companies whose products and services have gained them outstanding positions in their markets. The focus is on growth-driven, profitable, internationally operating companies.
Active: Mainly active in Germany but also in other European countries. The company they invest in are however active globally. For the full list please look here.

P/E: 9.1

For the previous analysis of Deutsche Beteiligungs AG please look here.
contrarian values of P/E, P/B, ROE as well as dividend 2014
The P/E for DBAG is still great with 9.1 and the reason for that the P/E has jumped up so much from the previous analysis is based on decreased earnings. The P/B is also fully acceptable with 1.1 which gives us a clear buy signal from Graham. The earning to sales are excellent with 80% but tells very little for an investment company with no production costs and widely fluctuating revenues. The ROE is so, so with only 11.6% and the book to debt is amazing with a ratio of 8.7. In the last five years they have grown yearly 5% which is very good and this gives us a motivated P/E of 15 to 18 which means that DBAG is still undervalued on the market. They pay two dividends. One is a fixed dividend of 0.4 € and the second one is due to the yearly result and gives an additional 0.8 € per share this year which then gives is a total dividend of 5.6% which is great! This represents 51% of the earnings so they can keep it up but I would probably have preferred if the would have kept the 0.8 € and invested that in companies instead.
Conclusion: Both Graham and I would say that this is company to buy for the long run. Today I already own this company and it is the smallest portion of my stock portfolio and probably the one company that I would like to increase a little in if I would have had the means which I do not at the moment. In the short run I think it will be bad to step in there today due to that they have a very large part of their portfolio in new investments which will take time before they have matured.

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