| Energiekontor AG (DE0005313506) | |||
46,35 EURStand (close): 04.07.25 |
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| Datum / Uhrzeit | Titel | Bewertung |
| 28.12.23 08:18:01 | Should You Be Adding Energiekontor (ETR:EKT) To Your Watchlist Today? |  |
| The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should. If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Energiekontor (ETR:EKT). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it. Check out our latest analysis for Energiekontor Energiekontor's Improving Profits Over the last three years, Energiekontor has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. Energiekontor's EPS shot up from €2.76 to €4.09; a result that's bound to keep shareholders happy. That's a commendable gain of 48%. One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. The music to the ears of Energiekontor shareholders is that EBIT margins have grown from 40% to 48% in the last 12 months and revenues are on an upwards trend as well. Ticking those two boxes is a good sign of growth, in our book. The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers. XTRA:EKT Earnings and Revenue History December 28th 2023 You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Energiekontor's future profits. Story continues Are Energiekontor Insiders Aligned With All Shareholders? Theory would suggest that it's an encouraging sign to see high insider ownership of a company, since it ties company performance directly to the financial success of its management. So those who are interested in Energiekontor will be delighted to know that insiders have shown their belief, holding a large proportion of the company's shares. In fact, they own 51% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. This makes it apparent they will be incentivised to plan for the long term - a positive for shareholders with a sit and hold strategy. This insider holding amounts to This is an incredible endorsement from them. While it's always good to see some strong conviction in the company from insiders through heavy investment, it's also important for shareholders to ask if management compensation policies are reasonable. Our quick analysis into CEO remuneration would seem to indicate they are. For companies with market capitalisations between €900m and €2.9b, like Energiekontor, the median CEO pay is around €1.4m. Energiekontor's CEO took home a total compensation package worth €748k in the year leading up to December 2022. That seems pretty reasonable, especially given it's below the median for similar sized companies. While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of good governance, more generally. Is Energiekontor Worth Keeping An Eye On? If you believe that share price follows earnings per share you should definitely be delving further into Energiekontor's strong EPS growth. If that's not enough, consider also that the CEO pay is quite reasonable, and insiders are well-invested alongside other shareholders. Everyone has their own preferences when it comes to investing but it definitely makes Energiekontor look rather interesting indeed. It's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Energiekontor , and understanding it should be part of your investment process. There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of German companies which have demonstrated growth backed by recent insider purchases. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 14.12.23 06:06:26 | With a 51% stake, Energiekontor AG (ETR:EKT) insiders have a lot riding on the company | |
| Key Insights Energiekontor's significant insider ownership suggests inherent interests in company's expansion 51% of the business is held by the top 2 shareholders 23% of Energiekontor is held by Institutions A look at the shareholders of Energiekontor AG (ETR:EKT) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company. So, insiders of Energiekontor have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view. In the chart below, we zoom in on the different ownership groups of Energiekontor. Check out our latest analysis for Energiekontor ownership-breakdown What Does The Institutional Ownership Tell Us About Energiekontor? Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing. As you can see, institutional investors have a fair amount of stake in Energiekontor. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Energiekontor's historic earnings and revenue below, but keep in mind there's always more to the story. earnings-and-revenue-growth We note that hedge funds don't have a meaningful investment in Energiekontor. Bodo Wilkens is currently the company's largest shareholder with 26% of shares outstanding. In comparison, the second and third largest shareholders hold about 25% and 5.2% of the stock. Story continues To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company. Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too. Insider Ownership Of Energiekontor The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO. Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances. It seems that insiders own more than half the Energiekontor AG stock. This gives them a lot of power. Given it has a market cap of €951m, that means insiders have a whopping €485m worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares. General Public Ownership The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies. Next Steps: While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Energiekontor that you should be aware of before investing here. Ultimately the future is most important. You can access this freereport on analyst forecasts for the company. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 30.11.23 04:53:17 | Is Energiekontor AG (ETR:EKT) A High Quality Stock To Own? | |
| While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. By way of learning-by-doing, we'll look at ROE to gain a better understanding of Energiekontor AG (ETR:EKT). Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Simply put, it is used to assess the profitability of a company in relation to its equity capital. See our latest analysis for Energiekontor How Do You Calculate Return On Equity? The formula for return on equity is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Energiekontor is: 44% = €57m ÷ €128m (Based on the trailing twelve months to June 2023). The 'return' refers to a company's earnings over the last year. Another way to think of that is that for every €1 worth of equity, the company was able to earn €0.44 in profit. Does Energiekontor Have A Good ROE? Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As is clear from the image below, Energiekontor has a better ROE than the average (14%) in the Electrical industry. roe That's clearly a positive. With that said, a high ROE doesn't always indicate high profitability. Aside from changes in net income, a high ROE can also be the outcome of high debt relative to equity, which indicates risk. Why You Should Consider Debt When Looking At ROE Most companies need money -- from somewhere -- to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. That will make the ROE look better than if no debt was used. Story continues Energiekontor's Debt And Its 44% ROE It seems that Energiekontor uses a huge volume of debt to fund the business, since it has an extremely high debt to equity ratio of 3.18. So although the company has an impressive ROE, the company might not have been able to achieve this without the significant use of debt. Summary Return on equity is useful for comparing the quality of different businesses. Companies that can achieve high returns on equity without too much debt are generally of good quality. All else being equal, a higher ROE is better. But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So you might want to check this FREE visualization of analyst forecasts for the company. But note: Energiekontor may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 16.11.23 04:07:16 | News Flash: Analysts Just Made A Captivating Upgrade To Their Energiekontor AG (ETR:EKT) Forecasts | |
| Energiekontor AG (ETR:EKT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. After this upgrade, Energiekontor's four analysts are now forecasting revenues of €371m in 2023. This would be a substantial 85% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to fall 12% to €3.60 in the same period. Previously, the analysts had been modelling revenues of €326m and earnings per share (EPS) of €3.64 in 2023. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share. View our latest analysis for Energiekontor earnings-and-revenue-growth Even though revenue forecasts increased, the consensus price target fell 9.8% to €120, perhaps suggesting that the analysts have become more pessimistic about the lack of earnings growth. Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Energiekontor's rate of growth is expected to accelerate meaningfully, with the forecast 85% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 14% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Energiekontor is expected to grow much faster than its industry. The Bottom Line The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Energiekontor's future valuation. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Energiekontor. Story continues Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Energiekontor going out to 2025, and you can see them free on our platform here.. We also provide an overview of the Energiekontor Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 06.11.23 05:47:56 | Is There Now An Opportunity In Energiekontor AG (ETR:EKT)? | |
| While Energiekontor AG (ETR:EKT) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €87.50 at one point, and dropping to the lows of €68.80. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Energiekontor's current trading price of €74.80 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Energiekontor’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Energiekontor Is Energiekontor Still Cheap? The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 18.32x is currently trading in-line with its industry peers’ ratio, which means if you buy Energiekontor today, you’d be paying a relatively sensible price for it. Furthermore, Energiekontor’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward. What kind of growth will Energiekontor generate? earnings-and-revenue-growth Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Energiekontor, it is expected to deliver a relatively unexciting earnings growth of 8.3%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term. Story continues What This Means For You Are you a shareholder? It seems like the market has already priced in EKT’s growth outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at EKT? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio? Are you a potential investor? If you’ve been keeping tabs on EKT, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive growth outlook may mean it’s worth diving deeper into other factors in order to take advantage of the next price drop. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 1 warning sign for Energiekontor you should be aware of. If you are no longer interested in Energiekontor, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 22.10.23 07:18:50 | Energiekontor (ETR:EKT) Could Become A Multi-Bagger | |
| To find a multi-bagger stock, what are the underlying trends we should look for in a business? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. Speaking of which, we noticed some great changes in Energiekontor's (ETR:EKT) returns on capital, so let's have a look. Return On Capital Employed (ROCE): What Is It? For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. To calculate this metric for Energiekontor, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.21 = €97m ÷ (€644m - €179m) (Based on the trailing twelve months to June 2023). Thus, Energiekontor has an ROCE of 21%. That's a fantastic return and not only that, it outpaces the average of 13% earned by companies in a similar industry. Check out our latest analysis for Energiekontor roce Above you can see how the current ROCE for Energiekontor compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our freereport on analyst forecasts for the company. How Are Returns Trending? Energiekontor is displaying some positive trends. Over the last five years, returns on capital employed have risen substantially to 21%. The amount of capital employed has increased too, by 58%. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed. For the record though, there was a noticeable increase in the company's current liabilities over the period, so we would attribute some of the ROCE growth to that. The current liabilities has increased to 28% of total assets, so the business is now more funded by the likes of its suppliers or short-term creditors. It's worth keeping an eye on this because as the percentage of current liabilities to total assets increases, some aspects of risk also increase. Story continues The Bottom Line A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what Energiekontor has. Since the stock has returned a staggering 438% to shareholders over the last five years, it looks like investors are recognizing these changes. In light of that, we think it's worth looking further into this stock because if Energiekontor can keep these trends up, it could have a bright future ahead. Energiekontor does have some risks though, and we've spotted 1 warning sign for Energiekontor that you might be interested in. Energiekontor is not the only stock earning high returns. If you'd like to see more, check out our free list of companies earning high returns on equity with solid fundamentals. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 07.10.23 06:57:00 | The total return for Energiekontor (ETR:EKT) investors has risen faster than earnings growth over the last five years |  |
| It might be of some concern to shareholders to see the Energiekontor AG (ETR:EKT) share price down 12% in the last month. But that doesn't undermine the fantastic longer term performance (measured over five years). In that time, the share price has soared some 421% higher! Arguably, the recent fall is to be expected after such a strong rise. Of course what matters most is whether the business can improve itself sustainably, thus justifying a higher price. In light of the stock dropping 4.7% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive five-year return. See our latest analysis for Energiekontor To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. During five years of share price growth, Energiekontor achieved compound earnings per share (EPS) growth of 38% per year. This EPS growth is remarkably close to the 39% average annual increase in the share price. That suggests that the market sentiment around the company hasn't changed much over that time. Rather, the share price has approximately tracked EPS growth. The image below shows how EPS has tracked over time (if you click on the image you can see greater detail). earnings-per-share-growth We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our freereport on Energiekontor's earnings, revenue and cash flow. What About Dividends? When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Energiekontor, it has a TSR of 467% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return. Story continues A Different Perspective While the broader market gained around 18% in the last year, Energiekontor shareholders lost 12% (even including dividends). Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 41% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Energiekontor you should know about. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of companies we expect will grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 17.08.23 04:06:55 | Energiekontor First Half 2023 Earnings: EPS: €1.50 (vs €0.61 in 1H 2022) | |
| Energiekontor (ETR:EKT) First Half 2023 Results Key Financial Results Revenue: €65.2m (up 24% from 1H 2022). Net income: €21.0m (up 145% from 1H 2022). Profit margin: 32% (up from 16% in 1H 2022). EPS: €1.50 (up from €0.61 in 1H 2022). earnings-and-revenue-growth All figures shown in the chart above are for the trailing 12 month (TTM) period Energiekontor Earnings Insights Looking ahead, revenue is forecast to grow 27% p.a. on average during the next 3 years, compared to a 8.6% growth forecast for the Electrical industry in Germany. Performance of the German Electrical industry. The company's shares are up 2.1% from a week ago. Risk Analysis We should say that we've discovered 1 warning sign for Energiekontor that you should be aware of before investing here. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 25.05.20 07:24:34 | Is Energiekontor AG (ETR:EKT) An Attractive Dividend Stock? | |
| Is Energiekontor AG (ETR:EKT) a good dividend stock? How can we tell? Dividend paying companies with growing earnings can be highly rewarding in the long term. If you are hoping to live on your dividends, it's important to be more stringent with your investments than the average punter. Regular readers know we like to apply the same approach to each dividend stock, and we hope you'll find our analysis useful. A slim 2.0% yield is hard to get excited about, but the long payment history is respectable. At the right price, or with strong growth opportunities, Energiekontor could have potential. The company also bought back stock equivalent to around 1.7% of market capitalisation this year. Some simple research can reduce the risk of buying Energiekontor for its dividend - read on to learn more. Click the interactive chart for our full dividend analysis XTRA:EKT Historical Dividend Yield May 25th 2020 Payout ratios Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. Looking at the data, we can see that 2368% of Energiekontor's profits were paid out as dividends in the last 12 months. Unless there are extenuating circumstances, from the perspective of an investor who hopes to own the company for many years, a payout ratio of above 100% is definitely a concern. Another important check we do is to see if the free cash flow generated is sufficient to pay the dividend. Energiekontor paid out 99% of its free cash last year. Cash flows can be lumpy, but this dividend was not well covered by cash flow. Cash is slightly more important than profit from a dividend perspective, but given Energiekontor's payouts were not well covered by either earnings or cash flow, we would definitely be concerned about the sustainability of this dividend. Story continues Is Energiekontor's Balance Sheet Risky? As Energiekontor's dividend was not well covered by earnings, we need to check its balance sheet for signs of financial distress. A rough way to check this is with these two simple ratios: a) net debt divided by EBITDA (earnings before interest, tax, depreciation and amortisation), and b) net interest cover. Net debt to EBITDA is a measure of a company's total debt. Net interest cover measures the ability to meet interest payments. Essentially we check that a) the company does not have too much debt, and b) that it can afford to pay the interest. With net debt of 4.34 times its EBITDA, investors are starting to take on a meaningful amount of risk, should the business enter a downturn. Net interest cover can be calculated by dividing earnings before interest and tax (EBIT) by the company's net interest expense. Interest cover of 1.11 times its interest expense is starting to become a concern for Energiekontor, and be aware that lenders may place additional restrictions on the company as well. Consider getting our latest analysis on Energiekontor's financial position here. Dividend Volatility One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. Not only is your income cut, but the value of your investment declines as well - nasty. For the purpose of this article, we only scrutinise the last decade of Energiekontor's dividend payments. This dividend has been unstable, which we define as having been cut one or more times over this time. During the past ten-year period, the first annual payment was €0.04 in 2010, compared to €0.40 last year. This works out to be a compound annual growth rate (CAGR) of approximately 26% a year over that time. The growth in dividends has not been linear, but the CAGR is a decent approximation of the rate of change over this time frame. So, its dividends have grown at a rapid rate over this time, but payments have been cut in the past. The stock may still be worth considering as part of a diversified dividend portfolio. Dividend Growth Potential Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. Over the past five years, it looks as though Energiekontor's EPS have declined at around 55% a year. With this kind of significant decline, we always wonder what has changed in the business. Dividends are about stability, and Energiekontor's earnings per share, which support the dividend, have been anything but stable. Conclusion Dividend investors should always want to know if a) a company's dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing. We're a bit uncomfortable with Energiekontor paying out a high percentage of both its cashflow and earnings. Second, earnings per share have been in decline, and its dividend has been cut at least once in the past. In this analysis, Energiekontor doesn't shape up too well as a dividend stock. We'd find it hard to look past the flaws, and would not be inclined to think of it as a reliable dividend-payer. It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, Energiekontor has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about. Looking for more high-yielding dividend ideas? Try our curated list of dividend stocks with a yield above 3%. Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading. |
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| 26.03.20 06:47:18 | Why We’re Not Impressed By Energiekontor AG’s (ETR:EKT) 7.0% ROCE | |
| Today we'll look at Energiekontor AG (ETR:EKT) and reflect on its potential as an investment. Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires. Firstly, we'll go over how we calculate ROCE. Next, we'll compare it to others in its industry. Last but not least, we'll look at what impact its current liabilities have on its ROCE. What is Return On Capital Employed (ROCE)? ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business. Generally speaking a higher ROCE is better. In brief, it is a useful tool, but it is not without drawbacks. Renowned investment researcher Michael Mauboussin has suggested that a high ROCE can indicate that 'one dollar invested in the company generates value of more than one dollar'. So, How Do We Calculate ROCE? Analysts use this formula to calculate return on capital employed: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for Energiekontor: 0.07 = €21m ÷ (€345m - €48m) (Based on the trailing twelve months to June 2019.) So, Energiekontor has an ROCE of 7.0%. See our latest analysis for Energiekontor Does Energiekontor Have A Good ROCE? When making comparisons between similar businesses, investors may find ROCE useful. In this analysis, Energiekontor's ROCE appears meaningfully below the 12% average reported by the Electrical industry. This performance could be negative if sustained, as it suggests the business may underperform its industry. Setting aside the industry comparison for now, Energiekontor's ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. It is possible that there are more rewarding investments out there. We can see that, Energiekontor currently has an ROCE of 7.0%, less than the 16% it reported 3 years ago. Therefore we wonder if the company is facing new headwinds. You can see in the image below how Energiekontor's ROCE compares to its industry. Click to see more on past growth. Story continues XTRA:EKT Past Revenue and Net Income March 26th 2020 When considering this metric, keep in mind that it is backwards looking, and not necessarily predictive. Companies in cyclical industries can be difficult to understand using ROCE, as returns typically look high during boom times, and low during busts. ROCE is, after all, simply a snap shot of a single year. Since the future is so important for investors, you should check out our freereport on analyst forecasts for Energiekontor. Energiekontor's Current Liabilities And Their Impact On Its ROCE Current liabilities are short term bills and invoices that need to be paid in 12 months or less. The ROCE equation subtracts current liabilities from capital employed, so a company with a lot of current liabilities appears to have less capital employed, and a higher ROCE than otherwise. To counter this, investors can check if a company has high current liabilities relative to total assets. Energiekontor has current liabilities of €48m and total assets of €345m. Therefore its current liabilities are equivalent to approximately 14% of its total assets. This very reasonable level of current liabilities would not boost the ROCE by much. The Bottom Line On Energiekontor's ROCE With that in mind, we're not overly impressed with Energiekontor's ROCE, so it may not be the most appealing prospect. Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this freelist of companies with modest (or no) debt, trading on a P/E below 20. If you are like me, then you will not want to miss this freelist of growing companies that insiders are buying. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading. |
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