HEN.DE - Henkel

[perulv]

"Henkel AG & Co. KGaA, together with its subsidiaries, engages in adhesive technologies, beauty care, and laundry and home care businesses worldwide."

 

The stock of this company has fallen in price for nearly two years now. Not without reason, earnings was down a bit last year, and ROE/ROA is also down the last couple of years. However, it seems like a solid company with steady growth in the long run, and a healthy balance sheet (less than 50% debt).

 

EV/ Ebitda is around 10, P/E around 15 (please don't trade on this numbers, I might have messed up etc).

 

To me, this looks like a good opportunity to buy value at a decent price. Thoughts? Is the low(er) price justified?

 

(Here is an article discussing it https://seekingalpha.com/article/4246552-forget-kraft-heinz-buy-henkel)

[Spekulatius]

I have Henkel on my watch list and agree it’s a quality company. I have owned this in the past in early 2008 and bought it a bit cheaper than it is currently due to being depressed after acquisition and it has done well for me. Their end markets (industrial adhesives, consumer goods like Unilever) are somewhat cyclical, so it’s not unusual for them to have one or two down years. Their profit losses tend to be moderate in a recession and they tend to recover quickly. It’s a good stock for the long term, due to very limited downside, imo.

[frommi]

Its one of the very few german businesses i follow in germany. They have a dual share structure, the preference shares (Vorzüge) are in the DAX the ordinary shares (Stammaktie) are not. Thats probably the only reason the preference shares are more expensive than the ordinary shares. 2018 EPS is 6.01€, so the preference shares trade at a P/E of 14.7, while the ordinary shares trade at 82.7€ or a P/E of 13.7. The current problems seem to be only currency effects, so it doesn`t look like the long term growth is under pressure, at least if one believes the management. (They expect 5-8% EPS growth)

"Umsatz

Im Geschäftsjahr 2018 sank der Umsatz nominal leicht um

–0,6 Prozent und erreichte 19.899 Mio Euro. Die Entwicklung

der Währungen wirkte sich mit –5,4 Prozent negativ auf den

Umsatz aus. Bereinigt um Wechselkurseffekte lag das Umsatzwachstum bei 4,8 Prozent. Akquisitionen/Divestments trugen

mit 2,4 Prozent zur Steigerung des Umsatzes bei."

 

Pricing power in the consumer products are under pressure from retailer owned brands in the last years. ( Washing powder (Persil), dishwasher tabs(Somat), etc. )

In the adhesive business which makes up 50% of revenues they have 3M as a major competitor and this business is not recession resistant. In 2009 their earnings took a 40% dive and in 2002 10%, so don`t expect earnings to be as stable as they are for other consumer companies like Procter and Gamble.

 

I would love to buy some below 70€ and hope that i get it that cheap in the summer, because german stocks are very prone to seasonality effects.