DOW $DOW (+1,77%)
Subsequent purchase of the US company
Solid value, good dividend and profiteer from EU prices in chemical production.
Perhaps upside potential in the US election year
Do you have DOW or what do you think of the company?
DOW $DOW (+1,77%)
Subsequent purchase of the US company
Solid value, good dividend and profiteer from EU prices in chemical production.
Perhaps upside potential in the US election year
Do you have DOW or what do you think of the company?
Spin the speculation carousel. 💸
It looks very gloomy above the clouds of the energy-intensive industry in Germany, but with exactly one value within the sector, the decline really annoys me the most. Therefore, I think that these could soon be taken over due to their now low stock market value.
I would like to present a few plausible reasons why I think this and why I may also speak of a significant undervaluation in general.
The stocks in question are Lanxess $LXS (+1,86%) .
Lanxess was the spin-off of the plastics division of the Bayer Group. It has been independently active on the stock market since 2005.
It has developed from a sad subsidiary into a successful and highly competitive company with still enormous group potential.
Here are some reasons why the share is clearly undervalued.
1. the market segment
Lanxess is primarily based in the chemical industry, but there are equally high-margin segments in this industry that Lanxess fills.
One supplies the important segments of:
The fact is that you come into contact with products from the Lanxess brand portfolio every day.
Here are a few examples:
Net margins of ~15% are not rare here, but rather average.
2. competition
Lanxess is the market leader in most areas of its chemical products and clearly competes with the top dog BASF in its areas. $BAS (+2,29%) and is challenging the Ludwigshafen-based company right down to its very substance.
3. production sites
Lanxess is also globally diversified in its choice of locations and thus linked to different markets in terms of cost balance. A decline of the German production sites would be devastating, roughly speaking, but not the end of the company.
It must be admitted, however, that most of the sites in Germany have definitely already been paid off and therefore represent the Group's cash cow. In the current situation, too much is coming together.
4. management
The management of Lanxess under Matthias Zachert is definitely a role model for the German industrial landscape. They recognize sensible market opportunities at an early stage and steer the Group specifically into high-margin niches, while at the same time maintaining the limit for expenditures within the framework.
It is not without reason that Buffet also holds a 5% stake in the company.
5. takeover theory
The following is of course only my thoughts and therefore pure speculation.
Since the downfall of the stock exchanges in 2022, German industrial stocks have not caught on. The current economic environment is too bad. The political support impulses are completely missing. Various industry associations are increasingly criticizing the economic competence behavior of the federal government, whereas the state governments have already recognized the seriousness of the situation and are assuring the companies of binding support.
Even with the Covestro offer, one could assume that foreign investors were keeping a closer eye on German industry in order to take advantage of the favorable prices.
Another likely example due to its unique brand portfolio may be Lanxess.
The enterprise value is likely to be slightly below €5 billion in 2023, whereas the sales outlook continues to be upward. The market value, on the other hand, is only put at just under €2 billion. However, a takeover bid of around €5 billion is estimated to be acceptable. The second factor, on the other hand, will be the management, but with the right sum one may certainly not deny.
But who would be interested in this?
It would be reasonable to assume that other Oriental emirates and funds would launch a capital attack on Europe and especially Germany in order to expand their economic and political influence here and accelerate the move away from oil. With a sustainable portfolio, such as Lanxess has, this would be an ideal complement.
But also US corporations, such as Dow $DOW (+1,77%) or DuPont $DD (-0,19%) could give a boost to their dominance of the plastics markets and absorb the innovative power of the German chemical industry. Difficult, however, would be antitrust concerns by the competition. But here, too, detours could be found through shareholdings or concessions to the competition, similar to the Linde $LIN (+0,07%) -Praxair merger.
What do you think about this?
Opinion about $DOW (+1,77%)
Say, have you guys looked into DOW in your search for good dividend stocks?
Seems pretty attractive to me. It's a global chemical company based in the US. The dividend yield is already at 6% now. Unfortunately can't say much about the increase as the company has only been around in this form since 2019. However, their payout ratio is just 30%. So there's still a lot of room for improvement. And 30% sounds like future increases to me.
I'm not quite done with my analysis yet, but so far everything seems great sein🙌🏽 what do you think?
𝗠𝗮𝗿𝗸𝗲𝘁 𝗡𝗲𝘄𝘀 🗞️
𝗦𝗔𝗣'𝘀 𝗖𝗹𝗼𝘂𝗱 / 𝗕𝗮𝘁𝘁𝗲𝗿𝗶𝗲-𝗔𝘂𝗳𝘁𝗿𝗮𝗴 / 𝗘𝗹 𝗦𝗮𝗹𝘃𝗮𝗱𝗼𝗿 𝗯𝗼𝘂𝗴𝗵𝘁 𝘁𝗵𝗲 𝗗𝗶𝗽 / 𝗞𝗿𝘆𝗽𝘁𝗼 𝗶𝗺 𝗻𝗲𝘂𝗲𝗻 𝗞𝗼𝗮𝗹𝗶𝘁𝗶𝗼𝗻𝘀𝘃𝗲𝗿𝘁𝗿𝗮𝗴
𝗘𝘅-𝗗𝗮𝘁𝗲𝘀 📅
As of today, among others, Allstate ($ALL (-0,58%)), Barrick Gold ($ABX (-0,23%)), Brookfield Asset Management ($BAM), CSX Corporation ($CSX (+1,8%)), Dow, Inc. ($DOW (+1,77%)), DuPont de Nemours ($DD (-0,19%)), Estée Lauder Companies ($EL (-1,75%)) and Moët Hennessy Louis Vuitton ($MOHF (+2,5%)) traded ex-dividend.
𝗤𝘂𝗮𝗿𝘁𝗮𝗹𝘀𝘇𝗮𝗵𝗹𝗲𝗻 📈
Today, among others, Li Auto ($LI (+2,01%)) presents its figures.
𝗠𝗮𝗿𝗸𝗲𝘁𝘀 🏛️
SAP ($SAP (+2,96%)) - SAP CEO Klein says SAP is becoming one of the largest cloud companies in the world. The focus on the cloud is expected to attract new investors to the software giant. After announcing a new strategy about a year ago, SAP's share price had crashed 20 percent in one day. Klein said that decision had been the right one and that the future lies in the cloud. SAP shares were up 2.76 percent at times on Monday to 117.33 euros.
Stellantis ($STLA (+0,86%)) - German lithium producer Vulcan Energie wins a major contract from Opel parent car company Stellantis. Vulcan is to supply between 81,000 and 99,000 tons of battery-grade lithium hydroxide to the auto group for at least five years starting in 2026. The lithium is to be extracted from thermal water from the Upper Rhine Graben. By simultaneously using the heat of the water extracted from the depths, the lithium is to be CO2-neutral. In view of the growing electric car boom, Vulcan Energie is considering going public.
𝗖𝗿𝘆𝗽𝘁𝗼 💎
El Salvador - Salvadoran President Nayib Bukele celebrated Black Friday by buying the dip again for 20% off. Five million US dollars were invested again and the total Bitcoin ($BTC (-0,49%)) rose to 1,220 BTC for El Salvador with a value of about 66.3 million US dollars.
The Federal Government - The coalition agreement of the new federal government mentions crypto for the first time. The new coalition wants to make the "European Financial Market Supervisory Law" fit for crypto assets and companies. A level playing field between traditional finance and "innovative business models" is to be advocated.
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