November 21, 2024
Top 10 Stock RWE 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: RWE – Top 10 Stock in Deutscher Aktienindex DAX 40
RWE is listed as a top 10 stock on November 21, 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, despite a currently slow growth momentum. Based on the Obermatt 360° View of 65 (high 65% performer), Obermatt assesses an overall buy recommendation for RWE on November 21, 2024.
Snapshot: Obermatt Ranks
| Country | Germany |
| Industry | Power Producers & Traders |
| Index | CDAX, DAX 40, Low Emissions, Diversity Europe, Nuclear, Water Tech |
| 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 RWE Buy
| 360 METRICS | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 67 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 74 |
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| SENTIMENT | ||||||||
| SENTIMENT | 81 |
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| 360° VIEW | ||||||||
| 360° VIEW | 65 |
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ANALYSIS: With an Obermatt 360° View of 65 (better than 65% compared with alternatives), overall professional sentiment and financial characteristics for the stock RWE are above average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for RWE. The consolidated Value Rank has an attractive rank of 67, which means that the share price of RWE is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 67% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 74. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 81. But the consolidated Growth Rank has a low rank of 7, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 93 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 65, RWE is better positioned than 65% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 67), secure financing practices (Safety Rank of 74), and positive market sentiment in the professional investor community (Sentiment Rank of 81). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 7), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of RWE is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for RWE very positive
ANALYSIS: With an Obermatt Sentiment Rank of 81 (better than 81% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock RWE is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for RWE. Analyst Opinions are at a rank of 89 (better than 89% 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 79, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 70, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 70% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 25, which means that currently, professional investors hold less stock in this company than in 75% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 81 (more positive than 81% compared with investment alternatives), RWE has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in RWE 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 RWE. ...read more
Value Strategy: RWE Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 67 (better than 67% compared with alternatives), RWE shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for RWE. Price-to-Sales (P/S) is 64, which means that the stock price compared with what market professionals expect for future sales is lower than for 64% of comparable companies, indicating a good value concerning RWE's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 89% of alternatives (11% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 39 are lower than average (dividends are expected to be lower than 61% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 47, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 67, is a buy recommendation based on RWE's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for RWE may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: RWE Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 7 (better than 7% compared with alternatives), RWE shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for RWE. Sales Growth has a rank of 34, which means that currently professionals expect the company to grow less than 66% of its competitors. The same is valid for Profit Growth, with a rank of 15, and Capital Growth with 30. In addition, Stock Returns have a below market rank of 25, which means that the stock returns have recently been below 75% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 7, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: RWE Debt Financing Safety above-average
| SAFETY METRICS | November 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 83 |
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| REFINANCING | ||||||||
| REFINANCING | 97 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 6 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 74 |
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ANALYSIS: With an Obermatt Safety Rank of 74 (better than 74% compared with alternatives), the company RWE has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of RWE is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for RWE.Leverage is at 83, meaning the company has a below-average debt-to-equity ratio. It has less debt than 83% of its competitors.Refinancing is at a rank of 97, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 97% of its competitors. Liquidity is at 6, meaning that the company generates less profit to service its debt than 94% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 74 (better than 74% compared with alternatives), RWE has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: RWE Below-Average Financial Performance
| COMBINED PERFORMANCE | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 67 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 6 |
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| COMBINED | ||||||||
| COMBINED | 41 |
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ANALYSIS: With an Obermatt Combined Rank of 41 (worse than 59% compared with investment alternatives), RWE (Power Producers & Traders, Germany) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of RWE are a good value (attractively priced) with a consolidated Value Rank of 67 (better than 67% of alternatives), are safely financed (Safety Rank of 74, which means low debt burdens), but show below-average growth (Growth Rank of 7). ...read more
RECOMMENDATION: A Combined Rank of 41, is a hold recommendation based on RWE's financial characteristics. As the company RWE's key financial metrics exhibit good value (Obermatt Value Rank of 67) but low growth (Obermatt Growth Rank of 7) while being safely financed (Obermatt Safety Rank of 74), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 67% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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