Analysis of BMW 2016

Company: BMW 

ISIN DE0005190003 | WKN 519000 

Business: A German car and motorcycle producer. They have three segments that they speak of: Cars (with BMW, Mini and Rolls-Royce), Motorcycles (with the BMW brand) and finally Financial Services. In cooperation with Sixth they also have DriveNow which is a car sharing system. 

Active: World wide sales of their cars and motorcycles. 

P/E: 8.1

Here you can find the previous analysis of BMW 2015. 

The P/E of BMW is silly low with 8.1 and so is the P/B with only 1.2 which gives a very, very clear buy signal from Graham. The earnings to sales look ok with 7% and the ROE is also ok with almost 15%. The book to debt ratio is down at 0.3 which I find low but all these companies have financing business which explains the low figure.
In the last five years they have had an excellent yearly revenue growth rate of 6% which gives us a motivated P/E of 17 to 20 which means that BMW is undervalued by the market.
Additionally they pay an excellent dividend of 4.1% which only corresponds to 33% of their earnings which should hopefully mean that they can keep it up.

Conclusion: Graham says yes to BMW and so do I.. To be honest I find it silly that one can buy such excellent car brands such as BMW, Mini and Rolls-Royce at a P/E of 8! Insane! So The P/E, P/B and dividend are all excellent and the ROE is fully acceptable. Additionally BMW have strong owners with skin in the game. Same goes here as for Allianz... I can not buy any more stocks in Germany but BMW would be worth to do the check list on to see if it would pass.

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