Analysis of Gazprom 2015

Company: Gazprom

ISIN US3682872078 | WKN 903276

Business: A Russian energy company that are sitting on 18 % of the worlds calculated gas reserves and 72% of Russia's gas reserves. They are active within more or less every field that has to do with gas so to just mention a few: Geological Exploration, Gas Production, Gas Transportation, Storage of Gas, Processing & Sales of Gas as well as Marketing of Heat and Electric Power.  

Active: 30 countries around Russia mainly to which gas pipelines could be built.

P/E: 23.1 (P/E5: 3.7)

Here you can find the previous analysis of Gazprom. 

This company was analysed due to a request posted on the Analysis Requests page. 

The P/E of Gazprom is far too high due to a poor year with 23.1 (the P/E5 still looks good though!) and the P/B is excellent which then in the end gives us a clear buy from Graham. The earnings to sales have dropped to a disappointing level with only 3% and the ROE is also awful with 1.6%. The book to debt ratio of 1.9 is great!
In the last five years they have had an excellent yearly revenue growth of 9.2% which gives us a motivated P/E of 22 to 27 which means that Gazprom is fairly valued today in spite of the poor result for 2014.
They pay an excellent dividend of 4.7% which does however correspond to 108% of their earnings so they better go back to more normalized earnings in the future!

Conclusion: Graham is still saying yes to Gazprom and I am also not negative to it. It did however get kicked out from the Stocks of Interest list since the P/E is now too high. Still, the P/B is excellent and if one believes that gas prices will once again increase and one does not fear Russia then it could still be a good moment to step in as shareholder in Gazprom. Personally I do not like that the shares are only offered as ADR over the US and not as GDR which would be better for me sitting in Europe.

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