the BASF-Aktie (WKN: BASF11) cannot necessarily take advantage of the positive performance of the last few weeks. Over a one-month horizon, the DAX chemical group is down around 15.9%. Of course, there are reasons for this.
But before we start small, let’s take a closer look at today’s chemical company. As well as the question of whether or not you should still access this before the DAX dividend season.
BASF shares: That’s a burden right now!
BASF’s stock currently shows that there is a cycle behind the group. The prospects are a bit uncertain, not mainly because of the conflict between Ukraine and Russia. No, but because of the indirect consequences. Rising energy prices is a possible construction site.
Another is the general increase in prices of almost everything. The DAX chemical group can also react sensitively to the value development of raw and basic materials for its own production. But at the moment there is rather one thing: general uncertainty and still few concrete consequences.
This means you can be a bit more cautious with BASF shares. But foolish investors may also question whether this uncertainty is still valid. Or maybe it is not yet included in the current fundamental price of the DAX chemical group. Of course, this is already relatively inexpensive.
The fundamental valuation and the dividend!
BASF’s share is currently valued at a share price of EUR 54.56. With a recently reported annual earnings per share of just over €6, the price-earnings ratio would currently be around 9.1. True, this value may fluctuate slightly. Especially if the market environment gets cloudy. However, it fairly illustrates a measure of economic evaluation.
The dividend is proving to be a constant. With a forecast of EUR 3.40 per share, an additional EUR 0.10 per share will be paid. Measured against the current share price, the dividend yield is a solid 6.23%, indicating a possible undervaluation. We must not ignore the current sustainable payout ratio of around 56%, but also the impressive history now of at least twelve years of constantly constant and often even higher dividends. Mastering the COVID-19 pandemic in particular shows how seriously the administration takes stability when it comes to the amount distributed per share.
Therefore, there may be uncertainties about BASF’s action. But based on the generally cheap valuation, no dividend cuts during the pandemic, and strong outlook despite potential uncertainties, I now think at least adding the cyclical is still attractive.
The article BASF Shares: A Buy Before the DAX Dividend Season?! first appeared in The Motley Fool Germany.
Vincent owns BASF shares. The Motley Fool does not own any of the shares mentioned.
Motley Fool Germany 2022