Monday 28 July 2014

Analysis of Bongrain

Bongrain, a French cheese and dairy products producer

Company: Bongrain

ISIN FR0000120107 | WKN 865541

Business: A French cheese and dairy producer. They have an amazing portfolio of cheese brands and for the full list of products please go to Bongrain brands.

Active: Present on every continent even though main focus is still France and Europe.

P/E: 17.8

Contrarian values of P/E, P/B, ROE as well as dividend for Bongrain

The P/E turned out higher than what I expected with 17.8 but the P/B is great with 0.8 which in the end still gives us a buy signal from Graham. The earnings to sales are horrible with 1% and the ROE is also not good with 4.4%. The book to debt ratio is low with 0.5.
in the last five years they have had a yearly growth rate of 4.4% which I find good and this then gives us a motivated P/E of 16 to 18 which means that Bongrain is today fairly valued on the market.
They pay a tiny dividend of 1.6% which on the other hand correspond to less than 30% of their earnings so they should be able to keep it up.

Conclusion: Graham says yes to this one and I say no. I find the P/E too high for me and that the ROE as well as the dividend is too low. I must admit that I was surprised by the quantity of brands that they own and in many cases brands that I had not clue belonged to one and the same French company.

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1 comment:

Fredrik von Oberhausen said...

They have now changed the name from Bongrain to Savencia Fromage & Dairy.