Returning cash to shareholders via increasing dividends and share buybacks. Shares outstanding:
2017 291m
2018 285m
2019 276m
2020 269m
2021 258m
2022 248m
Graham Defensive analysis based on Chapter 14 of The Intelligent Investor:
SECTOR: [PASS] Wolters Kluwer is an information services company.
SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Wolter Kluwer's sales of €5 453 million, based on 2022 sales, pass this test.
CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. Wolter Kluwer's current ratio €2 977m/€3 869m of 0,8 is too low.
LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for Wolters Kluwer is €3 331 million, while the net current assets are - €896 million. Wolters Kluwer fails this test.
LONG-TERM EPS GROWTH: [PASS] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. Wolter Kluwer's earnings per share grew 250% over the past 10 years.
Earnings Yield: [[FAIL] The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. Wolters Kluwer's E/P of 3,6% (using last years Earnings) fails this test.
Graham Number value: [FAIL] The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. Wolters Kluwer has a Graham number of √(15 x €3,5 EPS x 1,5 x €8 Book Value) = €24
Dividend: €1,8/€110 = 1,6%
Conclusion 2023: A wonderful company for investors.
SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Wolter Kluwer's sales of €5 453 million, based on 2022 sales, pass this test.
CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. Wolter Kluwer's current ratio €2 977m/€3 869m of 0,8 is too low.
LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for Wolters Kluwer is €3 331 million, while the net current assets are - €896 million. Wolters Kluwer fails this test.
LONG-TERM EPS GROWTH: [PASS] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. Wolter Kluwer's earnings per share grew 250% over the past 10 years.
Earnings Yield: [[FAIL] The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. Wolters Kluwer's E/P of 3,6% (using last years Earnings) fails this test.
Graham Number value: [FAIL] The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. Wolters Kluwer has a Graham number of √(15 x €3,5 EPS x 1,5 x €8 Book Value) = €24
Dividend: €1,8/€110 = 1,6%
No comments:
Post a Comment