August 1, 2024
Top 10 Stock Philips 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: Philips – Top 10 Stock in AEX Index
Philips is listed as a top 10 stock on August 01, 2024 in the market index AEX 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 72 (high 72% performer), Obermatt assesses an overall buy recommendation for Philips on August 01, 2024.
Snapshot: Obermatt Ranks
| Country | Netherlands |
| Industry | Health Care Equipment |
| Index | AEX, EURO STOXX 50, Dividends Europe, Employee Focus EU, Diversity Europe, Human Rights, Renewables Users, Recycling, SDG 12, SDG 13, SDG 17, SDG 3 |
| 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 Philips Buy
| 360 METRICS | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 50 |
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| SAFETY | ||||||||
| SAFETY | 43 |
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| SENTIMENT | ||||||||
| SENTIMENT | 65 |
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| 360° VIEW | ||||||||
| 360° VIEW | 72 |
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ANALYSIS: With an Obermatt 360° View of 72 (better than 72% compared with alternatives), overall professional sentiment and financial characteristics for the stock Philips are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Philips. The consolidated Value Rank has an attractive rank of 88, which means that the share price of Philips 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 88% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 50, 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 65. But the company’s financing is risky with a Safety rank of 43. This means 57% of comparable companies have a safer financing structure than Philips. ...read more
RECOMMENDATION: With a consolidated 360° View of 72, Philips is better positioned than 72% 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 88), above-average growth (Growth Rank of 50), and positive market sentiment in the professional investor community (Sentiment Rank of 65), 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 43), 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 Philips 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 Philips positive
ANALYSIS: With an Obermatt Sentiment Rank of 65 (better than 65% compared with alternatives), overall professional sentiment and engagement for the stock Philips is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Philips. Analyst Opinions are at a rank of 19 (worse than 81% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 86, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Philips. More encouragingly, the Professional Investors rank is 79, which means that professional investors hold more stock in this company than in 79% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 48, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 52% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 65 (more positive than 65% compared with investment alternatives), Philips has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for Philips. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Philips Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 88 (better than 88% compared with alternatives) for 2024, Philips shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Philips. Price-to-Sales is 75 which means that the stock price compared with what market professionals expect for future sales is lower than for 75% of comparable companies, indicating a good value for Philips's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 73% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 76. Compared with other companies in the same industry, dividend yields of Philips are expected to be higher than for 92% of all competitors (a Dividend Yield rank of 92). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 88, is a buy recommendation based on Philips's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Philips based on its detailed value metrics.
Growth Strategy: Philips Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 50 (better than 50% compared with alternatives), Philips 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 all but one indicator above average for Philips. Profit Growth has a rank of 64 which means that currently professionals expect the company to grow its profits more than 64% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 55, and Stock Returns has a rank of 78 which means that the stock returns have recently been above 78% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 14 (86% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 50, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Philips Debt Financing Safety below-average
| SAFETY METRICS | August 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 47 |
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| REFINANCING | ||||||||
| REFINANCING | 20 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 64 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 43 |
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ANALYSIS: With an Obermatt Safety Rank of 43 (better than 43% compared with alternatives), the company Philips 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 Philips 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 Philips. Liquidity is at 64, meaning the company generates more profit to service its debt than 64% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 20, 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 80% of its competitors. Leverage is also high at a rank of 47, which means that the company has an above-average debt-to-equity ratio. It has more debt than 53% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 43 (worse than 57% compared with alternatives), Philips 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: Philips Top Financial Performance
| COMBINED PERFORMANCE | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 50 |
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| SAFETY | ||||||||
| SAFETY | 64 |
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| COMBINED | ||||||||
| COMBINED | 79 |
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ANALYSIS: With an Obermatt Combined Rank of 79 (better than 79% compared with investment alternatives), Philips (Health Care Equipment, Netherlands) shares have much better financial characteristics than comparable stocks. Shares of Philips are a good value (attractively priced) with a consolidated Value Rank of 88 (better than 88% of alternatives), show above-average growth (Growth Rank of 50) but are riskily financed (Safety Rank of 43), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 79, is a strong buy recommendation based on Philips's financial characteristics. As the company Philips's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 88) and above-average growth (Obermatt Growth Rank of 50), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 43) 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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