MLP SE – Value Analysis (XETRA:MLP) : December 29, 2017

Capitalcube gives MLP SE a score of 61.

Our analysis is based on comparing MLP SE with the following peers – Swiss Life Holding AG, Union Financiere de France Banque SA and Banca Mediolanum SpA (SLHN-CH, UFF-FR and BMED-IT).

Investment Outlook

MLP SE has a fundamental score of 61 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • Compared to peers, relative outperformance over the last year has faded more recently.
  • It trades at a lower Price/Book multiple (1.59) than its peer median (2.02).
  • The market expects faster earnings growth from MLP-DE than from its peers and also a turnaround in its current ROE.
  • MLP-DE has relatively low net profit margins while its asset efficiency is relatively high.
  • Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.
  • Over the last five years, MLP-DE‘s return on assets has declined from above median to about median among its peers, indicating declining relative operating performance.
  • Compared with the peers chosen, MLP-DE has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
  • The company’s capital investment program and to-date returns suggest that the company is likely making big bets on the future.
  • MLP-DE might have enough interest coverage to take-on additional debt prudently.

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Leverage & Liquidity

MLP-DE might have enough interest coverage to take-on additional debt.

  • While MLP-DE‘s debt to enterprise ratio of 77.36% is on the high side compared to an overall benchmark of 25% (Note: The peer median is currently 49.54%), it also enjoys a relatively high interest coverage level of 5.94x which may give the company enough financial strength to support additional debt. Thus, the company is classified as having Some Capacity to raise more debt.
  • Of the 3 chosen peers for the company, only 2 of the stocks have an outstanding debt balance. Companies with no debt include UFF-FR.

MLP-DE has maintained its Some Capacity profile from the recent year-end.

  • MLP-DE‘s interest coverage is less than (but within one standard deviation of) its five-year average interest coverage of 6.94x.
  • The decrease in its interest coverage to 5.94x from 7.99x (in 2016) was also accompanied by a decrease in its peer median during this period to 5.60x from 6.49x.
  • Interest coverage fell 1.16 points relative to peers.
  • MLP-DE‘s debt-EV has declined 11.82 percentage points from last year’s high but remains above its five-year average debt-EV of 64.53.
  • Like the interest coverage trend, the decrease in its debt-EV (to 77.36% from 89.17%) was also accompanied by a decrease in its peer median during this period (to 49.54% from 53.47%).
  • Relative to peers, debt-EV fell 7.88 percentage points.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Swiss Life Holding AG 55.72 N/A 3.71 80.21
Union Financiere de France Banque SA 0 N/A No interest exp 999
Banca Mediolanum SpA 43.35 N/A 5.25 -21.72
MLP SE 77.36 12.88 5.94 3.15
Peer Median 49.54 12.88 5.6 41.68
Best In Class 43.35 12.88 No interest exp 999

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Company Profile

MLP SE is an investment holding company that engages in the provision of consulting, brokerage, and other financial services. It operates through the following segments: Holding, Financial Services, FERI, and DOMCURA. The Holding segment involves internal services and activities. The Financial Services segment performs their economic activities predominantly in Germany. The FERI segment handles the wealth and investment consulting services which operations in Germany and Luxembourg. The DOMCURA segment relates to the design, development and implementation of concepts in the field of non-life insurance as so-called underwriting agency, as well as brokerage activities. The company was founded by Eicke Marschollek and Manfred Lautenschläger on January 1, 1971 and is headquartered in Wiesloch, Germany.

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