XTRA:1COV

Stock Analysis Report

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Executive Summary

Covestro AG develops, produces, and markets polymer materials for various industries worldwide.


Snowflake Analysis

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Covestro's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1COV has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

5.9%

1COV

4.2%

DE Chemicals

3.1%

DE Market


1 Year Return

-2.4%

1COV

1.7%

DE Chemicals

14.0%

DE Market

Return vs Industry: 1COV underperformed the German Chemicals industry which returned 1.7% over the past year.

Return vs Market: 1COV underperformed the German Market which returned 14% over the past year.


Shareholder returns

1COVIndustryMarket
7 Day5.9%4.2%3.1%
30 Day0.9%2.2%2.3%
90 Day29.1%21.0%18.4%
1 Year1.2%-2.4%6.1%1.7%16.5%14.0%
3 Year-38.2%-44.5%-17.6%-26.4%7.4%-1.2%
5 Yearn/a-2.8%-18.7%23.8%7.2%

Price Volatility Vs. Market

How volatile is Covestro's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Covestro undervalued compared to its fair value and its price relative to the market?

1.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1COV (€37.4) is trading below our estimate of fair value (€37.97)

Significantly Below Fair Value: 1COV is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 1COV is poor value based on its PE Ratio (45x) compared to the DE Chemicals industry average (20x).

PE vs Market: 1COV is poor value based on its PE Ratio (45x) compared to the German market (21.9x).


Price to Earnings Growth Ratio

PEG Ratio: 1COV is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: 1COV's PB Ratio (1.3x) is in line with the DE Chemicals industry average.


Next Steps

Future Growth

How is Covestro forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

71.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1COV's forecast earnings growth (71.5% per year) is above the savings rate (0.2%).

Earnings vs Market: 1COV's earnings (71.5% per year) are forecast to grow faster than the German market (25.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 1COV's revenue (6.1% per year) is forecast to grow faster than the German market (5.8% per year).

High Growth Revenue: 1COV's revenue (6.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1COV's Return on Equity is forecast to be low in 3 years time (6.8%).


Next Steps

Past Performance

How has Covestro performed over the past 5 years?

8.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1COV has a large one-off gain of €114.0M impacting its June 30 2020 financial results.

Growing Profit Margin: 1COV's current net profit margins (1.4%) are lower than last year (7%).


Past Earnings Growth Analysis

Earnings Trend: 1COV's earnings have grown by 8.7% per year over the past 5 years.

Accelerating Growth: 1COV's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1COV had negative earnings growth (-83.8%) over the past year, making it difficult to compare to the Chemicals industry average (-15.2%).


Return on Equity

High ROE: 1COV's Return on Equity (3%) is considered low.


Next Steps

Financial Health

How is Covestro's financial position?


Financial Position Analysis

Short Term Liabilities: 1COV's short term assets (€5.7B) exceed its short term liabilities (€2.0B).

Long Term Liabilities: 1COV's short term assets (€5.7B) exceed its long term liabilities (€5.2B).


Debt to Equity History and Analysis

Debt Level: 1COV's debt to equity ratio (47.2%) is considered high.

Reducing Debt: 1COV's debt to equity ratio has reduced from 286.7% to 47.2% over the past 5 years.

Debt Coverage: 1COV's debt is well covered by operating cash flow (46.7%).

Interest Coverage: 1COV's interest payments on its debt are well covered by EBIT (4.5x coverage).


Balance Sheet


Next Steps

Dividend

What is Covestro current dividend yield, its reliability and sustainability?

3.21%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 1COV's dividend (3.21%) is higher than the bottom 25% of dividend payers in the German market (1.23%).

High Dividend: 1COV's dividend (3.21%) is low compared to the top 25% of dividend payers in the German market (3.78%).


Stability and Growth of Payments

Stable Dividend: 1COV has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 1COV's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (144.3%), 1COV's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1COV's dividends in 3 years are forecast to be well covered by earnings (48.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.8yrs

Average management tenure


CEO

Markus Steilemann (50 yo)

2.17yrs

Tenure

€4,293,000

Compensation

Dr. Markus Steilemann is Member of Management Board since August 20, 2015 of Covestro AG and serves its Chairman of Management Board. He serves as a Chief Executive Officer of Covestro AG since June 01, 20 ...


CEO Compensation Analysis

Compensation vs Market: Markus's total compensation ($USD5.08M) is above average for companies of similar size in the German market ($USD3.41M).

Compensation vs Earnings: Markus's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Markus Steilemann
CEO & Chairman of Management Board2.17yrs€4.29mno data
Thomas Toepfer
CFO, Labor Director & Member of Management Board2.33yrs€2.59mno data
Klaus Schäfer
CTO & Member of Management Board5yrs€2.12mno data
Sucheta Govil
Chief Commercial Officer & Member of Management Board0.92yr€1.20mno data
Ronald Koehler
Head of Investor Relationsno datano datano data
Joachim Wolff
Head of Polyurethanes Business Unit16.58yrsno datano data
Daniel Meyer
Head of Polyurethanes (PU) Segment9.08yrsno datano data
Michelle Jou
Head of Polycarbonates Segment4.58yrsno datano data
Michael Friede
Head of S Coatings2.92yrsno datano data
Uwe Arndt
Head of MDI Siteno datano datano data
Nils Janus
Head of Advanced Analyticsno datano datano data
Rainer Rettig
Head of the Circular Economy Programno datano datano data

3.8yrs

Average Tenure

57yo

Average Age

Experienced Management: 1COV's management team is considered experienced (3.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Ferdinando Falco Beccalli
Independent Member of Supervisory Board4.83yrs€106.00kno data
Richard Pott
Independent Chairman of Supervisory Board5yrs€309.00kno data
Petra Kronen
Vice Chairman of Supervisory Board4.83yrs€160.00kno data
Patrick Thomas
Member of Supervisory Board0.083yr€3.63mno data
Regine Stachelhaus
Independent Member of Supervisory Board4.83yrs€126.00kno data
Peter Hausmann
Employee Representative Member of Supervisory Board4.83yrs€153.00kno data
Johannes Dietsch
Independent Member of Supervisory Board5yrs€154.00kno data
Christine Bortenlänger
Independent Member of Supervisory Board4.83yrs€106.00kno data
Rolf Nonnenmacher
Independent Member of Supervisory Board5yrs€159.00kno data
Irena Küstner
Member of Supervisory Board4.83yrs€134.00kno data
Frank Werth
Member of Supervisory Board3.92yrs€106.00kno data
Marc Stothfang
Member of Supervisory Board3.5yrs€106.00kno data

4.8yrs

Average Tenure

60.5yo

Average Age

Experienced Board: 1COV's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Covestro AG's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Covestro AG
  • Ticker: 1COV
  • Exchange: XTRA
  • Founded: 2005
  • Industry: Specialty Chemicals
  • Sector: Materials
  • Market Cap: €6.839b
  • Shares outstanding: 182.86m
  • Website: https://www.covestro.com

Number of Employees


Location

  • Covestro AG
  • Kaiser-Wilhelm-Allee 60
  • Leverkusen
  • North Rhine-Westphalia
  • 51373
  • Germany

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1COVDB (Deutsche Boerse AG)YesShare CapitalDEEUROct 2015
1COVXTRA (XETRA Trading Platform)YesShare CapitalDEEUROct 2015
1COVDBATS-CHIXE (BATS 'Chi-X Europe')YesShare CapitalGBEUROct 2015
0RBELSE (London Stock Exchange)YesShare CapitalGBEUROct 2015
CVVT.FOTCPK (Pink Sheets LLC)YesShare CapitalUSUSDOct 2015
1COVSWX (SIX Swiss Exchange)YesShare CapitalCHCHFOct 2015
1COVETLX (Eurotlx)YesShare CapitalITEUROct 2015
1COVWBAG (Wiener Boerse AG)YesShare CapitalATEUROct 2015
1COV NBMV (Bolsa Mexicana de Valores)YesShare CapitalMXMXNOct 2015
COVT.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDFeb 2016
1CO1DB (Deutsche Boerse AG)SPONSORED ADRDEEURFeb 2016

Biography

Covestro AG develops, produces, and markets polymer materials for various industries worldwide. The company operates in three segments: Polyurethanes; Polycarbonates; and Coatings, Adhesives, Specialties. ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/14 11:06
End of Day Share Price2020/08/13 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.