Analysis of MüRe 2015

Company: Münchener Rückversicherung

ISIN DE0008430026 | WKN 843002

Business: A German re-insurance and insurance company. They have three pillars to stand on: Re-insurance (Covering the risks of other insurance companies), Primary Insurance (classical insurance for private persons or businesses) and finally Health Insurance (In countries with a private system). 

Active: All over the world with Re-insurance. The groups overall strongest presence is in Germany and Europe.

P/E: 10.9

Here you can find the previous analysis of MüRe 2014. 

The P/E for MüRe is excellent with 10.9 and the P/B is equally great with 1.2 which gives a very clear buy signal from Graham. The earnings to sales are ok with 5% but the ROE needs to be improved since it is down at 10.5%. The book to debt ratio is as bad as a bank with only 0.1.
In the last five years they have had a yearly revenue growth of 1.9% which more or less inflation so not very good and this then gives us a motivated P/E of 9 to 12 which means that MüRe today is fairly valued on the stock market.
They pay a very nice dividend of 3.9% which correspond to almost 43% of their earnings so it should be no problem with remained earnings to keep it up.

Conclusion: Graham gives his ok signal and I do not. Sure the P/E, P/B and dividend are all great but I want to see improvement in their growth and not this continuous decrease as we have seen lately. I see no reason to sell my shares but I would also not recommend anyone to buy until MüRe really shows some improvement.

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