These two value stocks are cheap! |

A price-to-earnings (P / E) ratio of 10 or less may indicate a cheap stock valuation. An investment pays for itself through the reported profit in less than ten years – as long as the profit stays at a correspondingly high level.

P / E is a relatively simple tool that can be used to quickly rank a stock. However, the metric has many disadvantages. So it only refers to a time. In addition, debt and growth prospects are not included.

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Despite its limited informative value, the P / E ratio is very popular among investors. Today, I would like to present two stocks that are currently trading at a single-digit price-to-earnings ratio. It deals with HeidelbergCement (WKN: 604700) also Fresenius (WKN: 578560) of two German value shares from DAX.

Two cheap value stocks from DAX

HeidelbergCement share

HeidelbergCement is a German building materials group with a market-leading position in Germany in cement and ready-mixed concrete. The Heidelberg-based company is the global market leader in aggregates.

More than 18 billion euros in sales was generated by the group in the financial year 2021 – an increase of 8%. In the end, the adjusted earnings per. share 7.90 EUR. Compared to the previous year, this corresponds to an increase of 15%. Based on the current share price of just over 50 euros (as of 13 June 2022), the price-earnings ratio is only 6.3.

Dividends and share buybacks

Shareholders benefit not only from a solid dividend, but also from a share buyback program. In the financial year 2021 alone, almost one billion euros were returned to shareholders through these two programs.

It is also positive that in a difficult market environment, a significant increase in sales of 12% was reported in the first quarter. This is how it will continue in 2022 as a whole: Management expects a continued sharp increase in sales with a small increase in earnings.

Fresenius share

With a single-digit price-earnings ratio is Fresenius share handles. Earnings per share were reported. share of EUR 3.35 for the financial year 2021. Based on the current share price of EUR 29.57 (as of 13 June 2022), the price-earnings ratio is only 8.8.

Fresenius has also recently proven robust in an increasingly difficult macroeconomic environment: In the first quarter of 2022, the Bad Homburg vor der Höhe-based healthcare group was able to report a 5% increase in sales to € 9.7 billion. The Group’s profit increased by 3%.

Further robust growth is expected

For the full year 2022, a currency-adjusted increase in the Group’s sales is expected in the middle single-digit percentage range. On the other hand, net income is expected to increase in the low single digits after currency adjustments.


Should both companies’ forecasts actually come true, the valuation based on the P / E ratio should remain low.

There is a reason for the low rating

There are a number of good reasons for the low P / E ratio. In absolute numbers, both companies have a high level of debt. Measured in company value, the valuation multiplier will therefore be significantly higher.

It should not be forgotten that every business has specific problems. For example, HeidelbergCement is highly dependent on the construction industry and reacts sensitively to inflation in raw materials and wages. HeidelbergCement’s core products are also considered to be less climate friendly.

The health group Fresenius is much more robust. However, this is experiencing some headwinds with the corona pandemic. The company is particularly hard hit by the fact that many patients at the dialysis subsidiary Fresenius Medical Care died as a result of corona disease.

The structure of the large company remains inefficient and not very clear. High growth rates seem difficult to achieve with this.

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Frank Seehawer owns shares in Fresenius and HeidelbergCement. The Motley Fool recommends Fresenius.

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