Yahoo Finance Is Now The Time To Put Allianz (ETR:ALV) On Your Watchlist?
It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Allianz (ETR:ALV). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Allianz with the means to add long-term value to shareholders.
View our latest analysis for Allianz
Allianz's Earnings Per Share Are Growing
If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. We can see that in the last three years Allianz grew its EPS by 9.2% per year. That's a good rate of growth, if it can be sustained.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. Not all of Allianz's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. While we note Allianz achieved similar EBIT margins to last year, revenue grew by a solid 4.1% to €108b. That's progress.
You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.
Fortunately, we've got access to analyst forecasts of Allianz's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are Allianz Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a €108b company like Allianz. But we are reassured by the fact they have invested in the company. Indeed, they hold €15m worth of its stock. That's a lot of money, and no small incentive to work hard. Even though that's only about 0.01% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.
Does Allianz Deserve A Spot On Your Watchlist?
As previously touched on, Allianz is a growing business, which is encouraging. If that's not enough on its own, there is also the rather notable levels of insider ownership. That combination is very appealing. So yes, we do think the stock is worth keeping an eye on. Now, you could try to make up your mind on Allianz by focusing on just these factors, or you could also consider how its price-to-earnings ratio compares to other companies in its industry.
There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of German companies which have demonstrated growth backed by recent insider purchases.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
