Discounted Cash Flow Calculation for DB:4LG using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:4LG DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Landis+Gyr Group's earnings available for a low price, and how does
this compare to other companies in the same industry?
Landis+Gyr Group's earnings are expected to grow by 7.5% yearly, however this is not considered high growth (20% yearly).
Landis+Gyr Group's revenue is expected to grow by 4% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Landis+Gyr Group's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
2/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Landis+Gyr Group's finances.
The net worth of a company is the difference between its assets and liabilities.
Landis+Gyr Group is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Landis+Gyr Group's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Landis+Gyr Group's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
Low level of unsold assets.
Debt is covered by short term assets, assets are 3.6x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Richard Mora has served as Chief Executive Officer of Landis+Gyr Holdings since April 2017. He served as a Member of board of Directors of Enphase Energy, Inc. since February 2014. He served as Chief Operating Officer of Landis+Gyr from January 2014 to April 2017. Prior to his current role, he served as President and CEO of Landis+Gyr Americas from August 2011 to January 2014. Previous positions include President and CEO of Landis+Gyr North America Metering from August 2008 to August 2011, Vice-President and CEO of Siemens Metering, Inc., and Director of Quality for Siemens Power Transmission & Distribution. Mr. Mora holds a Bachelor of Arts degree in Economics from Stanford University in Palo Alto, California. He spent 18 years at Landis+Gyr
His Prior Positions at Landis+Gyr: EVP and Head of Americas
His Prior Other Positions: Various management positions within the Siemens Group and positions at GE Capital, included as a Merger & Acquisitions Manager.
Insufficient data for Richard to compare compensation growth.
Insufficient data for Richard to establish whether their remuneration is reasonable compared to companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Landis+Gyr Group management team is over 5 years, this suggests they are a seasoned and experienced team.
Chief Executive Officer
CFO & Executive VP
Executive VP & CTO
Head of Investor Relations
Group General Counsel
Senior Vice President of Corporate Communications
Senior Vice President of Global Human Resource
Chief Procurement Officer & Executive VP
Head of Governmental Affairs & Public Relations and Vice President
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Landis+Gyr Group board of directors is less than 3 years, this suggests a new board.
Landis+Gyr Group AG provides metering solutions for electricity, heat/cold, and gas utilities worldwide. The company offers digital and prepayment electricity, commercial/industrial and grid, smart gas, heat and water, and stand-alone gas meters; load control devices; system deployment services and managed network services; meter data management software; and advanced grid analytics tools. It also provides other advanced metering infrastructure offerings, such as software, installation, implementation, consulting, maintenance support, and related services. The company was formerly known as Landis+Gyr Holding AG. Landis+Gyr Group AG was founded in 1896 and is headquartered in Zug, Switzerland.
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