It really looks like the DAX is now correcting again. On Thursday of this week, our leading domestic index last struggled with the 12,300 mark. The stock market barometer is therefore further away from its intermediate high of over 13,000 points.
Is it the uncertainty about the corona virus, or is it a mixed reporting season? Or both in combination? You can certainly discuss that. What is more important, however, is which stocks will become increasingly interesting.
If you ask me, two stocks from our domestic leading index are now on the watchlist. Namely that Allianz (WKN: 840400) and E.ON (WKN: ENAG99). Why? We want to take a closer look at this in the following.
One of the first stocks that could obviously become much, much cheaper again is that of Allianz. At a current share price of EUR 177.44 (July 31, 2020, decisive for all prices), the price-earnings ratio, at least measured against the 2019 figures, is less than 10. The price-book value ratio is approaching back to the value of fair 1. However, the dividend yield remains above a value of 5%. Management has already confirmed that a constant distribution will continue to be paid in the coming year.
What else is the alliance deal? Well, for now, of course, investors are waiting for the second quarter figures. After all, the stock exchanges and markets have calmed down again. This could indicate that the investment result has improved again. However, it remains to be seen whether the corona virus has otherwise affected the operational figures.
For the first quarter, the DAX insurer had to announce a 30% drop in earnings. However, and that still remains an option: Even if the 2020 financial year remained mixed, the insurer could in the medium term continue on the old, record-breaking track of success. As part of a V or U recovery in the operating figures, the Allianz share could now definitely appear cheap.
A second stock, which is apparently rather moderately valued, is that of E.ON. The current price level of the supplier is quoted at 9.95 euros and thus again under the mark of around 10 euros. With 2019 earnings per share of EUR 0.68, this would correspond to a price-earnings ratio of around 14.6. The annual turnover was last at 17.88 euros and thus about 0.6 times this value. The dividend yield, based on a recent dividend of EUR 0.46, would be approximately 4.6%. That could also be attractive.
E.ON struggled with a drop in earnings in the first quarter and even slipped into the red. But don’t worry: these were special effects. After all, the DAX provider recently took over innogy. And thus possibly strengthening your own competitive position.
The 94% increase in sales could indicate strong growth from this acquisition. In addition, the basis of the outstanding shares was only increased by 20% through this purchase. That in turn could mean: Yes, innogy creates added value for investors, which could make the valuation more favorable. This could particularly appeal to investors if the stock continues to correct.
Investors, be careful!
For foolish investors, this could be the time to be vigilant. The markets could correct. This in turn would mean that some quality stocks are valued again more cheaply. Are Allianz and E.ON included? In the end, your final decision. However, a closer look will never hurt.
The post Let’s go! DAX fights with 12,300 points – these stocks are on the watchlist appeared first on The Motley Fool Germany.
Vincent owns Allianz shares. The Motley Fool does not own any of the stocks mentioned.
Motley Fool Deutschland 2020