BASF Stock: Buy Dividend Dip | The variegated fool Germany

In it BASF-Shares (WKN: BASF11), the discount for the dividend has now been made. This means that the DAX chemical company recently lost 3.40 euros in value. Admittedly, some investors either lose interest in the stock after the distribution. Or buy right after the stock has fallen.

Should foolish investors buy BASF’s dividend dip now? Let’s look at the basic starting position after the divestment. As well as what now needs to be considered in relation to opportunities and risks.

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BASF share in dividend dip: valuation

Basically, BASF shares after the dividend dive are anything but expensive. With a share price of 47.54 euros, many classic ratios are relatively cheap. Just started with the dividend yield of purely arithmetic 7.15%. If the chemical company DAX were to pay another such dividend of 3.40 euros per. share next year, it is at least a good time.

But it now also reflects other key figures. With an annual profit of just over 6 euros recently, the price-earnings ratio would currently be less than 8. Annual sales of 85 euros again lead to a price-sales ratio of less than 0.6 and a book value per share. share from 45.82 euros we are approaching a price-to-book ratio of around 1.

We can therefore say: BASF shares are particularly cheap after the payment of dividends. Assuming an operational context, this means that the share can provide a very solid return potential, at least in the medium to long term. Positive side note: Due to a stable yield even during the corona pandemic, we can probably expect the distributions to remain constant in the coming years. Or that at least there is a good chance of it.

Opening vs. more difficult market conditions

Another positive for the BASF share is that the market is increasingly reopening. In light of the restrictions in the pandemic, the corona virus is nearing its end. It is true that China is a market that is once again going through a tough period. But in general, the impact and limitations are already noticeably less.

On the other hand, rising energy prices have a negative impact. BASF benefits from rising oil and natural gas prices through its Wintershall share. It can at least be a solid hedge against this cost side. However, there is another looming problem: An oil and natural gas embargo against Russia could affect the production of the chemical company DAX, which would certainly be significant. Due to the political environment, market participants do not seem to have a long-term view of this share.

In the end, a lot is possible. But for the BASF share, the dividend dip has again led to a really cheap starting point. The financial year 2021 showed how profitable the chemical company can be. And thus: how cheap is the valuation of the not entirely risk-free cyclical stock at the moment.

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Vincent owns shares in BASF. The Motley Fool does not own any of the listed shares.

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