| freenet AG (DE000A0Z2ZZ5) | |||
27,62 EURStand (close): 01.07.25 |
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| Datum / Uhrzeit | Titel | Bewertung |
| 23.04.25 04:03:06 | freenet (ETR:FNTN) Is Looking To Continue Growing Its Returns On Capital |  |
| To find a multi-bagger stock, what are the underlying trends we should look for in a business? Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's 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. So when we looked at freenet (ETR:FNTN) and its trend of ROCE, we really liked what we saw. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. What Is Return On Capital Employed (ROCE)? If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on freenet is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.17 = €379m ÷ (€3.3b - €1.1b) (Based on the trailing twelve months to December 2024). Therefore, freenet has an ROCE of 17%. In absolute terms, that's a satisfactory return, but compared to the Wireless Telecom industry average of 8.4% it's much better. See our latest analysis for freenet XTRA:FNTN Return on Capital Employed April 23rd 2025 Above you can see how the current ROCE for freenet compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering freenet for free. What The Trend Of ROCE Can Tell Us freenet has not disappointed in regards to ROCE growth. The figures show that over the last five years, returns on capital have grown by 126%. The company is now earning €0.2 per dollar of capital employed. Speaking of capital employed, the company is actually utilizing 37% less than it was five years ago, which can be indicative of a business that's improving its efficiency. If this trend continues, the business might be getting more efficient but it's shrinking in terms of total assets. The Bottom Line On freenet's ROCE In the end, freenet has proven it's capital allocation skills are good with those higher returns from less amount of capital. And a remarkable 177% total return over the last five years tells us that investors are expecting more good things to come in the future. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist. If you'd like to know about the risks facing freenet, we've discovered 1 warning sign that you should be aware of. Story Continues While freenet may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this freelist 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. View Comments |
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| 02.04.25 12:58:21 | freenet (ETR:FNTN) Is Increasing Its Dividend To €1.97 | |
| freenet AG (ETR:FNTN) will increase its dividend from last year's comparable payment on the 16th of May to €1.97. This will take the dividend yield to an attractive 5.2%, providing a nice boost to shareholder returns. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. freenet's Projected Earnings Seem Likely To Cover Future Distributions A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, freenet's dividend made up quite a large proportion of earnings but only 67% of free cash flows. In general, cash flows are more important than earnings, so we are comfortable that the dividend will be sustainable going forward, especially with so much cash left over for reinvestment. The next year is set to see EPS grow by 17.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 68% by next year, which is in a pretty sustainable range.XTRA:FNTN Historic Dividend April 2nd 2025 Check out our latest analysis for freenet Dividend Volatility The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2015, the dividend has gone from €1.50 total annually to €1.85. This implies that the company grew its distributions at a yearly rate of about 2.1% over that duration. It's encouraging to see some dividend growth, but the dividend has been cut at least once, and the size of the cut would eliminate most of the growth anyway, which makes this less attractive as an income investment. The Dividend Looks Likely To Grow With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. freenet has impressed us by growing EPS at 12% per year over the past five years. Recently, the company has been able to grow earnings at a decent rate, but with the payout ratio on the higher end we don't think the dividend has many prospects for growth. freenet Looks Like A Great Dividend Stock In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock. Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for freenet that investors need to be conscious of moving forward. Is freenet not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks. 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. View Comments |
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| 29.03.25 07:02:44 | freenet Full Year 2024 Earnings: EPS Misses Expectations | |
| freenet (ETR:FNTN) Full Year 2024 Results Key Financial Results Revenue: €2.55b (down 3.9% from FY 2023). Net income: €297.6m (up 93% from FY 2023). Profit margin: 12% (up from 5.8% in FY 2023). The increase in margin was driven by lower expenses. EPS: €2.50 (up from €1.30 in FY 2023). We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.XTRA:FNTN Earnings and Revenue Growth March 29th 2025 All figures shown in the chart above are for the trailing 12 month (TTM) period freenet EPS Misses Expectations Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 13%. Looking ahead, revenue is forecast to grow 1.5% p.a. on average during the next 3 years, compared to a 3.5% growth forecast for the Wireless Telecom industry in Europe. Performance of the market in Germany. The company's share price is broadly unchanged from a week ago. Risk Analysis Don't forget that there may still be risks. For instance, we've identified 1 warning sign for freenet that you should be aware of. 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. View Comments |
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| 08.03.25 06:57:44 | freenet (ETR:FNTN) Has Announced That It Will Be Increasing Its Dividend To €1.97 | |
| freenet AG (ETR:FNTN) has announced that it will be increasing its periodic dividend on the 16th of May to €1.97, which will be 11% higher than last year's comparable payment amount of €1.77. This will take the dividend yield to an attractive 5.1%, providing a nice boost to shareholder returns. See our latest analysis for freenet freenet's Future Dividend Projections Appear Well Covered By Earnings While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. The last payment made up 77% of earnings, but cash flows were much higher. This leaves plenty of cash for reinvestment into the business. Looking forward, earnings per share is forecast to rise by 17.3% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 73%, which would make us comfortable with the sustainability of the dividend, despite the levels currently being quite high.XTRA:FNTN Historic Dividend March 8th 2025 Dividend Volatility While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The dividend has gone from an annual total of €1.45 in 2015 to the most recent total annual payment of €1.77. This implies that the company grew its distributions at a yearly rate of about 2.0% over that duration. Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent. freenet May Find It Hard To Grow The Dividend 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. Earnings has been rising at 4.0% per annum over the last five years, which admittedly is a bit slow. Earnings are not growing quickly at all, and the company is paying out most of its profit as dividends. That's fine as far as it goes, but we're less enthusiastic as this often signals that the dividend is likely to grow slower in the future. In Summary Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. In the past, the payments have been unstable, but over the short term the dividend could be reliable, with the company generating enough cash to cover it. We would probably look elsewhere for an income investment. Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for freenet that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers. 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. View Comments |
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| 06.03.25 07:02:14 | freenet AG (WBO:FNTN) Q4 2024 Earnings Call Highlights: Record EBITDA and Strategic Growth ... |  |
| EBITDA: EUR521.5 million, with a special effect from the sale of IP addresses. Free Cash Flow: EUR292 million, up 5.7% from 2023. Revenue Growth: Up 4% year-over-year. Dividend Proposal: EUR1.97 per share, equivalent to 80% of free cash flow. Subscriber Growth: Total subscribers increased by 6.9%, with 182,000 net adds. Postpaid Net Adds: 103,000 in the fourth quarter. Gross Profit: Increased from EUR915 million to EUR974 million. Mobile Revenue: Stable development with a slight increase in service revenues. TV and Media Revenue: Nearly EUR400 million, with waipu.tv contributing nearly 50%. CapEx: EUR38 million in 2024, expected to increase in 2025. Guidance for 2025: EBITDA of EUR520 million to EUR540 million, free cash flow of EUR300 million to EUR320 million. Warning! GuruFocus has detected 6 Warning Sign with WBO:FNTN. Release Date: March 05, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points freenet AG (WBO:FNTN) reported a record EBITDA of over EUR 520 million for 2024, marking a successful year. The company achieved a significant increase in free cash flow, reaching EUR 292 million, up 5.7% from 2023. freenet AG's Mobile Communications sector performed well, with strong postpaid net additions and long-term contracts secured. The waipu.tv service saw substantial growth, with nearly 600,000 new customers added, contributing positively to EBITDA. The company plans to distribute 80% of its free cash flow as dividends and has announced a share buyback program for 2025. Negative Points The freenet TV segment continues to lose subscribers, with no clear floor in sight, impacting overall growth. There was a decrease in gross profit in Q4 2024 compared to the previous year, partly due to lower performance bonuses. The company faced increased bad debt provisions and higher HR costs due to inflation, affecting EBITDA. ARPU (Average Revenue Per User) showed a slight decrease, indicating potential challenges in maintaining revenue per customer. The IPTV segment experienced churn from Telefonica customers, impacting net sales despite overall growth. Q & A Highlights Q: Can you discuss the competitive dynamics in the German Mobile market and the impact of M&Os using their own channels? A: Christoph Vilanek, CEO, explained that while there were concerns about unlimited offers from competitors, customer understanding was limited, and it did not significantly impact freenet's churn or intake. He noted that freenet benefits from the current market dynamics, with competitors like Vodafone struggling, allowing freenet to capitalize on the situation. Story Continues Q: What drove the strong mobile postpaid net adds in Q4, and how significant was the contribution from the new brand Happy SIM? A: Christoph Vilanek, CEO, stated that Happy SIM was not a major contributor. The growth was attributed to a broader online service offering and cost-efficient operations, with more visibility through online channels. Q: What is your view on potential consolidation in the German mobile market? A: Christoph Vilanek, CEO, expressed skepticism about consolidation in Germany, citing stable market conditions and reasonable performance from major players like Deutsche Telekom and Telefonica. He noted that rumors about United Internet's network plans persist, but no significant consolidation is expected. Q: Can you explain the impact of accounting changes on Q4 EBITDA and the performance bonuses? A: Ingo Arnold, CFO, clarified that the restatement had a minimal impact on Q4 EBITDA. The lower performance bonuses in Q4 2024 compared to Q4 2023 were due to an exceptionally high bonification in 2023, which was not repeated in 2024. Q: What factors will determine the size of the share buyback, and what is the timeline for its execution? A: Ingo Arnold, CFO, mentioned that the share buyback, up to EUR100 million, will depend on business developments and will be proposed to the Supervisory Board for approval by the end of March. The buyback is expected to start in Q2, with restrictions on daily trade volumes. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. View Comments |
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| 04.02.25 05:19:13 | Investing in freenet (ETR:FNTN) five years ago would have delivered you a 100% gain | |
| When we invest, we're generally looking for stocks that outperform the market average. Buying under-rated businesses is one path to excess returns. For example, long term freenet AG (ETR:FNTN) shareholders have enjoyed a 51% share price rise over the last half decade, well in excess of the market return of around 2.1% (not including dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 30%, including dividends. Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns. See our latest analysis for freenet There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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, freenet achieved compound earnings per share (EPS) growth of 4.0% per year. This EPS growth is lower than the 9% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth. You can see how EPS has changed over time in the image below (click on the chart to see the exact values).XTRA:FNTN Earnings Per Share Growth February 4th 2025 We know that freenet has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this freereport showing consensus revenue forecasts. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for freenet the TSR over the last 5 years was 100%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return. A Different Perspective It's nice to see that freenet shareholders have received a total shareholder return of 30% over the last year. That's including the dividend. That gain is better than the annual TSR over five years, which is 15%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand freenet better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for freenet you should know about. Story Continues 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. View Comments |
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| 01.10.24 07:26:32 | Investors Will Want freenet's (ETR:FNTN) Growth In ROCE To Persist | |
| There are a few key trends to look for if we want to identify the next multi-bagger. Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's 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. With that in mind, we've noticed some promising trends at freenet (ETR:FNTN) so let's look a bit deeper. What Is Return On Capital Employed (ROCE)? Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for freenet: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.15 = €344m ÷ (€3.2b - €955m) (Based on the trailing twelve months to June 2024). Thus, freenet has an ROCE of 15%. On its own, that's a standard return, however it's much better than the 8.8% generated by the Wireless Telecom industry. See our latest analysis for freenet roce In the above chart we have measured freenet's prior ROCE against its prior performance, but the future is arguably more important. If you're interested, you can view the analysts predictions in our freeanalyst report for freenet . What Can We Tell From freenet's ROCE Trend? freenet has not disappointed in regards to ROCE growth. We found that the returns on capital employed over the last five years have risen by 95%. That's not bad because this tells for every dollar invested (capital employed), the company is increasing the amount earned from that dollar. In regards to capital employed, freenet appears to been achieving more with less, since the business is using 38% less capital to run its operation. freenet may be selling some assets so it's worth investigating if the business has plans for future investments to increase returns further still. The Key Takeaway In the end, freenet has proven it's capital allocation skills are good with those higher returns from less amount of capital. And with a respectable 85% awarded to those who held the stock over the last five years, you could argue that these developments are starting to get the attention they deserve. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence. Like most companies, freenet does come with some risks, and we've found 1 warning sign that you should be aware of. Story continues For those who like to invest in solid companies, check out this freelist of companies with solid balance sheets and high returns on equity. 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. View comments |
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| 26.08.24 06:03:41 | Investing in freenet (ETR:FNTN) five years ago would have delivered you a 91% gain | |
| When we invest, we're generally looking for stocks that outperform the market average. And while active stock picking involves risks (and requires diversification) it can also provide excess returns. For example, the freenet AG (ETR:FNTN) share price is up 44% in the last 5 years, clearly besting the market return of around 4.8% (ignoring dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 29%, including dividends. So let's assess the underlying fundamentals over the last 5 years and see if they've moved in lock-step with shareholder returns. See our latest analysis for freenet While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. During five years of share price growth, freenet achieved compound earnings per share (EPS) growth of 5.1% per year. This EPS growth is lower than the 8% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth. You can see below how EPS has changed over time (discover the exact values by clicking on the image). earnings-per-share-growth We know that freenet has improved its bottom line lately, but is it going to grow revenue? You could check out this freereport showing analyst revenue forecasts. What About Dividends? As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, freenet's TSR for the last 5 years was 91%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments! A Different Perspective We're pleased to report that freenet shareholders have received a total shareholder return of 29% over one year. That's including the dividend. That gain is better than the annual TSR over five years, which is 14%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand freenet better, we need to consider many other factors. For instance, we've identified 1 warning sign for freenet that you should be aware of. Story continues For those who like to find winning investments this freelist of undervalued companies with recent insider purchasing, could be just the ticket. 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. View comments |
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| 24.06.24 05:46:25 | freenet AG's (ETR:FNTN) Stock is Soaring But Financials Seem Inconsistent: Will The Uptrend Continue? | |
| freenet (ETR:FNTN) has had a great run on the share market with its stock up by a significant 7.9% over the last month. However, we wonder if the company's inconsistent financials would have any adverse impact on the current share price momentum. Particularly, we will be paying attention to freenet's ROE today. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. See our latest analysis for freenet 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 freenet is: 14% = €203m ÷ €1.5b (Based on the trailing twelve months to March 2024). The 'return' is the yearly profit. Another way to think of that is that for every €1 worth of equity, the company was able to earn €0.14 in profit. What Is The Relationship Between ROE And Earnings Growth? So far, we've learned that ROE is a measure of a company's profitability. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes. freenet's Earnings Growth And 14% ROE To start with, freenet's ROE looks acceptable. Further, the company's ROE compares quite favorably to the industry average of 5.1%. As you might expect, the 13% net income decline reported by freenet is a bit of a surprise. Based on this, we feel that there might be other reasons which haven't been discussed so far in this article that could be hampering the company's growth. Such as, the company pays out a huge portion of its earnings as dividends, or is faced with competitive pressures. That being said, we compared freenet's performance with the industry and were concerned when we found that while the company has shrunk its earnings, the industry has grown its earnings at a rate of 9.5% in the same 5-year period. past-earnings-growth Earnings growth is an important metric to consider when valuing a stock. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. Doing so will help them establish if the stock's future looks promising or ominous. Is freenet fairly valued compared to other companies? These 3 valuation measures might help you decide. Story continues Is freenet Using Its Retained Earnings Effectively? With a three-year median payout ratio as high as 116%,freenet's shrinking earnings don't come as a surprise as the company is paying a dividend which is beyond its means. Its usually very hard to sustain dividend payments that are higher than reported profits. Moreover, freenet has been paying dividends for at least ten years or more suggesting that management must have perceived that the shareholders prefer dividends over earnings growth. Upon studying the latest analysts' consensus data, we found that the company's future payout ratio is expected to drop to 87% over the next three years. As a result, the expected drop in freenet's payout ratio explains the anticipated rise in the company's future ROE to 18%, over the same period. Summary On the whole, we feel that the performance shown by freenet can be open to many interpretations. In spite of the high ROE, the company has failed to see growth in its earnings due to it paying out most of its profits as dividend, with almost nothing left to invest into its own business. With that said, we studied the latest analyst forecasts and found that while the company has shrunk its earnings in the past, analysts expect its earnings to grow in the future. To know more about the company's future earnings growth forecasts take a look at this freereport on analyst forecasts for the company to find out more. 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. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com View comments |
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| 27.05.24 08:40:52 | freenet AG's (ETR:FNTN) largest shareholders are retail investors with 53% ownership, institutions own 38% | |
| Key Insights The considerable ownership by retail investors in freenet indicates that they collectively have a greater say in management and business strategy A total of 25 investors have a majority stake in the company with 43% ownership Institutional ownership in freenet is 38% A look at the shareholders of freenet AG (ETR:FNTN) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 53% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn). Institutions, on the other hand, account for 38% of the company's stockholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Let's take a closer look to see what the different types of shareholders can tell us about freenet. Check out our latest analysis for freenet ownership-breakdown What Does The Institutional Ownership Tell Us About freenet? Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices. As you can see, institutional investors have a fair amount of stake in freenet. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at freenet's earnings history below. Of course, the future is what really matters. earnings-and-revenue-growth freenet is not owned by hedge funds. Norway is currently the company's largest shareholder with 8.7% of shares outstanding. JP Morgan Asset Management is the second largest shareholder owning 5.9% of common stock, and BlackRock, Inc. holds about 5.0% of the company stock. On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest. 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily. Insider Ownership Of freenet While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it. Story continues I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid. General Public Ownership The general public, who are usually individual investors, hold a substantial 53% stake in freenet, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions. Next Steps: It's always worth thinking about the different groups who own shares in a company. But to understand freenet better, we need to consider many other factors. Be aware that freenet is showing 1 warning sign in our investment analysis, you should know about... 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. View comments |
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