April 11, 2024
Top 10 Stock E.ON Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: E.ON – Top 10 Stock in Deutscher Aktienindex DAX 40
E.ON is listed as a top 10 stock on April 11, 2024 in the market index DAX 40 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 86 (top 86% performer), Obermatt assesses an overall strong buy recommendation for E.ON on April 11, 2024.
Snapshot: Obermatt Ranks
| Country | Germany |
| Industry | Multi-Utilities |
| Index | CDAX, DAX 40, Low Emissions, Human Rights, Nuclear |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View E.ON Strong Buy
| 360 METRICS | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 73 |
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| SAFETY | ||||||||
| SAFETY | 42 |
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| SENTIMENT | ||||||||
| SENTIMENT | 69 |
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| 360° VIEW | ||||||||
| 360° VIEW | 86 |
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ANALYSIS: With an Obermatt 360° View of 86 (better than 86% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock E.ON are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for E.ON. The consolidated Value Rank has an attractive rank of 69, which means that the share price of E.ON is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 69% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 73, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 69. But the company’s financing is risky with a Safety rank of 42. This means 58% of comparable companies have a safer financing structure than E.ON. ...read more
RECOMMENDATION: With a consolidated 360° View of 86, E.ON is better positioned than 86% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 69), above-average growth (Growth Rank of 73), and positive market sentiment in the professional investor community (Sentiment Rank of 69), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 42), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of E.ON is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for E.ON positive
ANALYSIS: With an Obermatt Sentiment Rank of 69 (better than 69% compared with alternatives), overall professional sentiment and engagement for the stock E.ON is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for E.ON. Analyst Opinions are at a rank of 61 (better than 61% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 97, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 64, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 64% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 20, which means that currently, professional investors hold less stock in this company than in 80% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 69 (more positive than 69% compared with investment alternatives), E.ON has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in E.ON may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in E.ON. ...read more
Value Strategy: E.ON Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 69 (better than 69% compared with alternatives), E.ON shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for E.ON. Price-to-Sales (P/S) is 89, which means that the stock price compared with what market professionals expect for future sales is lower than for 89% of comparable companies, indicating a good value concerning E.ON's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 69% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 58 (dividends are expected to be higher than 58% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 72% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for E.ON to 28. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 69, is a buy recommendation based on E.ON's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: E.ON Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), E.ON shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for E.ON. Capital Growth has a rank of 63, which means that currently professionals expect the company to grow its invested capital more than 48% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 83 (above 83% of alternative investments). But Sales Growth has only a rank of 28, which means that, currently, professionals expect the company to grow less than 72% of its competitors, and Profit Growth is also low at a rank of 48. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 73, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for E.ON, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: E.ON Debt Financing Safety below-average
| SAFETY METRICS | April 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 27 |
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| REFINANCING | ||||||||
| REFINANCING | 8 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 42 |
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ANALYSIS: With an Obermatt Safety Rank of 42 (better than 42% compared with alternatives), the company E.ON has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of E.ON is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for E.ON. Liquidity is at 98, meaning the company generates more profit to service its debt than 98% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 8, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 92% of its competitors. Leverage is also high at a rank of 27, which means that the company has an above-average debt-to-equity ratio. It has more debt than 73% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 42 (worse than 58% compared with alternatives), E.ON has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: E.ON Top Financial Performance
| COMBINED PERFORMANCE | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 73 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| COMBINED | ||||||||
| COMBINED | 78 |
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ANALYSIS: With an Obermatt Combined Rank of 78 (better than 78% compared with investment alternatives), E.ON (Multi-Utilities, Germany) shares have much better financial characteristics than comparable stocks. Shares of E.ON are a good value (attractively priced) with a consolidated Value Rank of 69 (better than 69% of alternatives), show above-average growth (Growth Rank of 73) but are riskily financed (Safety Rank of 42), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 78, is a strong buy recommendation based on E.ON's financial characteristics. As the company E.ON's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 69) and above-average growth (Obermatt Growth Rank of 73), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 42) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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