Over the past weeks and months, stock prices have risen very quickly and sharply. In view of the crisis and the economic downturn, very few would have expected this. This is due to the strong interventions by central banks and extreme government economic support programs.
As a result, many currencies are losing value and the price of gold is skyrocketing in parallel. Many market participants are currently expecting a rapid economic recovery (at the latest in 2021). But at the moment the results look very weak. In the second quarter of 2020, the American and German economies fell 32.9% and 10.1%, respectively.
Nevertheless, these situations always offer good entry opportunities for long-term investors. One of them could currently be the Ackermans & van Haaren (WKN: 869057) share. Although the company is based in Belgium, already has a market capitalization of over 3.67 billion euros (30.07.2020) and is growing rapidly, almost no one will probably know it. This shall be changed now.
Ackermans & van Haarens business model
Ackermans is a holding company that invests in companies with good market positions and growth prospects. These currently include the following five areas: Naval Construction & Contracting, Private Banking, Real Estate & Elderly Care, Energy & Resources and Growth Capital.
Ackermans is represented by several companies in each of these sectors. In marine construction, this includes DEME, one of the largest marine construction companies in the world, or green offshore, which is involved in the construction of Belgian wind farms.
Private banking includes Delen Private Bank and Bank J. Van Breda & C, which are mainly active in asset management. Immobilien & Altenpflege builds real estate mainly in Belgian cities through the company Extensa. Animare Care now invests and operates 22 retirement homes.
Energy & resources, for example, invests in agricultural projects in tropical regions and owns an Indian cement manufacturer with Sagar Cements. In addition, Ackermans invests through the growth capital division in many family businesses that have a strong market position and high growth potential.
The company originated in 1876 (initially as an excavator company), is based in Antwerp (Belgium) and currently employs around 21,522 people.
So far the company has been so successful
From 1984 to the end of 2019, the holding company increased its book value by an average of 12.5%. The market value rose at a similar rate with an average of 12.8%. Although it does not achieve Berkshire Hathaways (WKN: A0YJQ2) results that can produce book value increases of more than 20% on average, it is still far above the market average.
In the period from 2010 to 2019 alone, sales and profits grew from EUR 339 to 4,277 million and from EUR 161 to 394 million. The profit margin in 2019 was 9.2% and the return on equity over the past ten years has mostly been around 10%. The equity ratio is 22.6%. In addition, the dividend per share has grown continuously since 2008 from EUR 1.39 to EUR 2.40 recently.
The holding company expects a slump in earnings in 2020, but still a profit. The broad diversification of the participations across various economic sectors contributes to this.
The stock is no longer expensive at the moment
Ackermans & van Haaren is active in a number of areas that are sensitive to the economy and will experience declines this year, but they all have a good market position and are therefore likely to weather the crisis.
On the other hand, this growth value is now only quoted at a price-book value ratio of 1.05 (30.07.2020), which is favorable in every respect. In addition there is a dividend yield of 2.2% (30.07.2020).
The post 1 dividend and growth shares of a traditional company at an affordable price! appeared first on The Motley Fool Germany.
Christof Welzel does not own any of the shares mentioned. The Motley Fool owns and recommends shares of Berkshire Hathaway (B shares) and recommends the following options: Short September 2020 $ 200 call on Berkshire Hathaway (B-Aktien), Short January 2021 $ 200 put on Berkshire Hathaway (B shares) and Long January 2021 call $ 200 Berkshire Hathaway (B-Aktien).
Motley Fool Deutschland 2020