Have a great Friday closing time.

My share today is $MLP (-0.84%)

Here again from a smaller area of the

FINANCIAL SERVICE PROVIDER

MLP - undervalued quality?

The restructuring of the financial services provider that took place at MLP around 2005, which has made the Group stronger in growth and more profitable. With the current CFO Reinhard Loose, who joined the company in 2011, sets ambitious medium-term growth targets for the company.

At DAX times (2001 to 2003), the company, which today serves almost 600,000 private and corporate customers, was heavily focused on retirement provision (80% of revenues). Today, by contrast, around 40% of revenue comes from asset management (assets under management: around 56 billion euros), with retirement provision and insurance each contributing around a quarter. In addition to greater breadth, there is also greater reliability in the income streams: "More than 60% of our income is now recurring. This means that with just under one billion euros in sales per year, 600 million euros are already relatively secure at the beginning of the year," whereas only about 30% of revenues are recurring. Due to the broad positioning, "we may grow a bit slower, but continuously - without deep valleys."

Good likes the ambitious short- and medium-term growth targets, which are the result of ongoing three-year planning. "This year, we are a bit more conservative in our forecast because there are still some uncertainties in the markets in 2023." Nevertheless, he is also calculating an EBIT increase of up to 12% this year (target: €75 million to €85 million, compared with €75.6 million in the previous year). In the medium-term planning, annual sales growth in the mid-single-digit percentage range (Loose: "This may well be in the high single-digit range") is envisaged up to 2025, with an EBIT increase "with slightly double-digit growth rates". Equally important for shareholders: in terms of return on equity (RoE), "our goal is to be just under double digits" (in 2016 it was only 4.8%). "We are also very cash-flow strong, as evidenced, among other things, by the fact that we distribute 50% to 70% of our profits to shareholders each year in the form of a dividend" (RoE: around 6%).

At the same time, the share (5.5 euros; DE0006569908) is clearly undervalued. Over the past ten years, the stock has traded on average at a P/E ratio of 17, and currently the 2023 P/E ratio of 11 is even below the range of 12 to 22. "We currently feel significantly undervalued on the markets in view of our low P/E ratio as well as in view of the considerable dividend yield. One explanation could be that second-line stocks and stocks from the financial sector are currently viewed with caution on the markets," Loose said.

ZDF:

Earnings per share in EUR 0.47

P/E RATIO 10.94

KBV 1.85

KCV 1.76

Sources: Platow, Investor, Börse.de

Kind regards