Analysis of Romgaz

Company: Romgaz 

ISIN ROSNGNACNOR3 | WKN A1W7F9 

Business: A Romanian energy company. The main activities concerns: Exploration, Natural gas production, Electric Power Production. Storage, Trade, Technological Transport and finally Well Operations.

Active: Romania

P/E: 9.2

Comment: For an excellent and in-depth analysis please visit my blog colleague Value and Opportunity by clicking on SNGR Romgaz.

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

The P/E for Romgaz is excellent with 9.2 and the P/B is also great with 1.3 which gives a very clear buy according to Graham. The earnings to sales are wonderful with 31% and the ROE is also very good with 14.5%. The book to debt ratio is excellent with 8.8.
In the last five years they have had a bad yearly revenue growth rate of 1.7% which then gives us a motivated P/E of 9 to 12 which means that Romgaz today is fairly valued.
They pay an excellent dividend of 9.4%! However this correspond to 86% of their earnings and by the look of it they have often been up around that level of 90%. The Romanian state still owns 70% and back in 2010 it was decided on the shareholders meeting that the Romanian state should receive a donation in the size of 400 million RON which surprise, surprise went through.

Conclusion: Graham says yes and I am not as sure. I like the P/E, P/B, ROE and dividend but not that %-age of dividend compared to earnings and I dislike that the state is sitting on 70% and giving themselves donations as they see fit. No, Romgaz is not for me at this moment.

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