Vonovia share: K-FFO-V out of 12 possible?

In it Vonovia-Act (WKN: A1ML7J) there is new insight. It is not enough that the management said important things about the dividend and the further growth at this year’s annual general meeting. No, but there are also fresh figures.

After the annual general meeting, the figures for the first quarter came, if you like. Basically, I see the possibility that the DAX stock may reach a price-FFO ratio of 12. Or the title-giving K-FFO-V at this height. Let’s take a closer look.

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Vonovia part: Let’s look at the numbers!

As we can see from a look at Vonovia’s shareholding, management can show significant growth in this ratio in the first quarter. With a value of 0.73 EUR per. per share, we are 12.3% above the previous year’s figure. This is of course accompanied by, among other things, the merger with Deutsche Wohnen. But even adjusted, growth is solid.

Perhaps for the sake of completeness: Revenue showed year-on-year growth of 42.6% to 1.63 billion euros. On the other hand, funds from operations at group level grew by 44.4% to DKK 564 million. EUR. Just an amazing growth that has a clear trigger.

But now back to the Vonovia share: if we think further on these figures, there may be a value of 2.92 EUR in the financial year 2022, which is quite close to 3.00 EUR. With a current stock price of around 36 EUR (after the presentation of the figures), I see a price-FFO ratio of 12 as realistic. Whereby this value may become cheaper due to moderate growth.

Again pro forma: In the outlook, management also emphasizes that funds from operations at group level are expected to amount to DKK 2 billion. EUR in the current financial year. A goal value that seems realistic based on these numbers.

Really interesting review!

The Vonovia share with a possible price-FFO ratio of 12? It’s attractive. What if you add a dividend of over 4.5% and net tangible assets of € 63? I think with a multiple of 0.6 based on the intrinsic value, a higher safety margin is already priced.

I am currently seeing a clear, favorable opportunity with a defensive business model in the Vonovia stock. Residential real estate is always possible. In addition, the management presented the crucial course for solid growth, which is now being enjoyed. It is an attractive base and a cheap valuation for long-term investors, who are currently facing some volatility.

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

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