Analysis of Dürr 2015

Company: Dürr

ISIN DE0005565204 | WKN 556520

Business: A German automobile supplier. They are divided into five divisions: Paint and Final Assembly Systems (paint shops and for assembly lines), Application Technology (paint, glue and sealing technologies), Measuring and Process Systems (balancing, testing and cleaning of machines), Clean Technology Systems (air purification and energy efficient systems) and Woodworking Machinery and Systems (machinery and plants for woodworking).

Active: They are currently active in 28 countries world wide so they have entered 5 new markets since the last analysis.

P/E: 19.0

Here you can find the previous analysis of Dürr.

The P/E has become far too high with 19.0 and the P/B is equally too high with 5.3 which gives a very clear no go from Graham. The earnings to sales are ok with 6% and the ROE is excellent with almost 28%! The book to debt ratio is down at 0.3 which I find too low!
In the last six years they have had an excellent yearly revenue growth rate of 7% which then gives us a motivated P/E of 19 to 23 which means that Dürr is today fairly valued on the market.
They spend around 30% of their earnings on research & development which I find to be a reasonable amount!
They pay out a tiny dividend of 1.9% which happily only correspond to 36% of their earnings so hopefully they should be able to keep that up.

Conclusion: Graham is saying no and so do I today. Dürr has simply becoming fairly valued on the market and especially considering that they have doubled the amount of shares since the last analysis! So is has indeed been a very nice share price development to end up as being the fairly valued company that it is today. The only value that impress me is the ROE however it loses some of its shine due to the low book to debt ratio. Dürr was kicked out from the Stocks of Interest list.

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