Analysis of Allianz SE (ALVX:GER)

I was talking to you a little over a year ago de ce géant allemand de l'assurance, Allianz. Voyons comment la situation a évolué avec la publication des chiffres 2018.

Valuation & dividend

Paradoxically, while the stock has gained 3% since last year, Allianz's valuation ratios are even more attractive than last year, thanks to the excellent 2018 results. Indeed, ALVX is now trading at:

  • 11.10 times current recurring earnings
  • 12.16 times average recurring earnings
  • 1.35 times book value
  • 1.75 times tangible assets
  • 0.86 times sales
  • 3.34 times current free cash flow
  • 3.25 times average free cash flow

EBIT and EBITDA also represent 8,92% and 9,23% of the enterprise value respectively.

On the dividend side, it's fireworks, since the yield amounts to 4,59%, for an average annual growth of 5,61% (over the last five years). Moreover, this generosity is not achieved by squandering resources since the dividend represents:

  • 51.02% of current recurring profit
  • 55.88% of average recurring profit
  • 15.36% of current free cash flow
  • 14.92% of average free cash flow

It should be noted that the payment of half of the profit in the form of dividends is not a coincidence. It corresponds to Allianz's policy.

Balance sheet & result

Just like the dividend, profits, cash reserves and asset values are increasing over the long term. Allianz is therefore clearly succeeding in creating value for its shareholders and this is reflected in the share price, which has almost tripled over the last ten years.

La marge nette de l'assureur allemand est correcte, avec 7.77%, mais ce qui impressionne le plus c'est sa marge de free cash flow, avec 25.82%. Cette dernière explique pourquoi le ratio de valorisation par rapport au FCF est si bas et de même pour le distribution ratio du dividende par rapport au FCF. Machine à sous, planche à billets, vache à lait... appelez cela comme vous voulez : Allianz a une capacité impressionnante à générer des liquidités!

From a profitability point of view it is not as marked, but still quite correct, with an ROE of 12.19%, an ROA of 0.83 (increasing) and a CFROA of 2.92%.

The long-term debt-to-asset ratio, although slightly up, remains quite reasonable at 3.65%. The company would be able to wipe out all of its debt, which is only 0.57 times its equity, in less than a year and a half.

It should also be noted that the number of shares in circulation has been falling for two years, which increases the shareholder's share of the pie.

Conclusion

Allianz est un mastodonte de l'assurance, figurant parmi les leaders mondiaux de la gestion d'actifs. L'entreprise allemande possède une histoire de 129 ans qui parle clairement en sa faveur. Par sa valorisation attractive et ses excellents fondamentaux, elle serait même capable de mettre d'accord les disciples de Graham et de Buffett sur de nombreux points. Sa taille la met en effet à l'abri des nouveaux concurrents et son domaine, bien qu'ayant recours aux moyens modernes de communication, n'est pas sous la menace d'une obsolescence technologique. Allianz affiche par ailleurs des frais généraux qui feraient pâlir d'envie n'importe quel gestionnaire. Son goodwill est en hausse et les dépenses en capital sont relativement basses. Nous avons aussi vu que la dette était totalement sous contrôle et que la marge, en particulier en FCF, était remarquable. L'assureur allemand possède indéniablement de nombreuses caractéristiques propres aux franchises, sans compter que c'est un titre relativement défensif, avec un beta de 0.88% et une volatility dans la moyenne (17.32%). Bref, c'est le genre de titre qu'on peut acheter et oublier dans un coin.

I bought Allianz almost two years ago, currently making a profit in CHF with dividend of 14%. I still think that the stock is slightly undervalued and I will of course hold it. Is it a stock to buy or to strengthen? Despite all the good things I think about Allianz, and even if its price is quite correct, I think that the margin of safety is no longer as good as it was when I bought it almost two years ago.


Discover more from dividendes

Subscribe to get the latest posts sent to your email.

Leave a Comment

Your email address will not be published. Required fields are marked *