AG Reddit Mentions | ChartExchange

Some notes I made earlier on Deutche Post… Unfortunately outside my circle of competence as I don’t know the shipping business.
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Key figures
Market cap is 50bn EUR
IFRS Equity 23.7 bn EUR
2022 net profit of EUR 5.4 bn (2021: 5.1bn) - attributable to shareholders
EBIT/Sales: 8.9% (2021: 9.8%)
EPS of EUR 4.41 in 2022 up from 4.1 in 2021
ROE: 20-30%
Dividend has gone EUR 1.05 to EUR 1.85 since 2016 up 76% or 10% YoY. Yield is 4.5%.
Buyback yield c. 2% assuming 2022 is typical.
Dividend policy
“Our finance strategy calls for paying out 40% to 60% of net profit as dividends as a general rule. The Board of Management and the Supervisory Board will therefore propose to the shareholders at the Annual General Meeting on 4 May 2023 a dividend of €1.85 per share for the 2022 financial year (previous year: €1.80). The payout ratio in relation to the consolidated net profit attributable to Deutsche Post AG shareholders amounts to 41.1%. The net dividend yield based on the year-end closing price for our shares is 5.3%. The dividend will be disbursed on 9 May 2023.”
https://www.dpdhl.com/en/investors/shares/dividend.html
Dividend history is impressive not a drop since 2006 EUR 0.60. Management engaged in EUR 3bn buyback programme 2022-2024.
https://www.dpdhl.com/content/dam/dpdhl/en/media-relations/events/2023/annual-earnings-2022/DPDHL-Presentation-Q4-FY-2022.pdf slide 16
Bear case/worries: long-term: Amazon wipes out their model or makes it significantly less profitable, short-term: macro environment/recession/inflation and debt load.
Macro environment : Management believes given the experience of past recessions they still can do EUR 9-11bn FCF 2023-2025 or 20% of market cap over 3 yrs. Management has improved the equity ratio 10% since 2020 and seems to be indicating this may be extrapolated/kept steady. Debt seems to mature steadily over the next years. Interest cover is 18-20x. Management want to maintain their Fitch BBB+ rating which is basically maintenance of investment grade status. EUR 13.5bn lease obligations c. 2 bn due per annum which I guess is just another form of debt.
Long-term: Does Amazon want to get involved in shipping? Anti-trust issues? Better opportunities?
“Industry watchers have paid close attention to Amazon's growing in-house logistics operations, speculating it aims to directly compete with major carriers like UPS, FedEx and the U.S. Postal Service. Indeed, Dave Clark, Amazon's CEO of worldwide consumer, told CNBC last year that Amazon was on track to become the nation's largest delivery service by early 2022.”
https://www.cnbc.com/amp/2022/04/21/amazon-ramps-up-fedex-ups-rivalry-by-expanding-prime-to-third-parties.html
At the same time, Amazon has rolled out new services that make use of its sizable logistics assets. Last year, the company launched long-term inventory storage services at its distribution services for third-party sellers. By the end of January, Amazon plans to expand its “Buy with Prime” service to all U.S. merchants, connecting their outside websites to Amazon’s fulfillment network and delivery capabilities.
“They were all set to launch a third-party service before the pandemic hit, and then they had to pull it back,” the University of Tennessee’s Amling said of Amazon. “I would not be surprised if they dust off all those plans and execute those in 2023.”
https://www.supplychaindive.com/news/2023-parcel-carrier-diversification-fedex-ups-competition-amazon/640495/
“Many are asking themselves: why will Amazon compete against UPS and FedEx on their own turf, considering the $122 billion it will likely cost them to catch up? It isn't unlike Amazon to move into a new market for the sole purpose of expansion (just look at their cloud computing division, among dozens of other examples). But this move has more personal motives. Shipping their own products would save them $3 per package.
While, to many, that initially won't seem worth it, small costs add up rather quickly when you're working on such a large scale. Consider that this per package savings of $3 could add up to as much as $525 million in Amazon's pockets over the course of a single 48-hour Prime Day event! The ability to recoup over half a billion dollars in a single weekend seems to answer the original question, "Why will Amazon compete against FedEx and UPS?" a few times over. “
https://blog.eniture.com/will-amazon-compete-against-fedex-and-ups?hs_amp=true
„We have a lot of respect for Amazon, but we don’t look at them as a peer competitor.
Frederick W. Smith
Founder and Executive Chairman, FedEx“ Feb 2023
„Amazon’s delivery and transport system is not a hub-and-spoke model, like FedEx’s system of regional hubs and location stations is. Instead, Amazon is “designed to move slow-moving inventory that is held in a small number of distribution centers, and move them cross-country so that you can get them in two business days,” he said.
Smith said that he sees UPS as the company’s only real peer competitor. “DHL is very strong overseas, but they’re not strong in the United States,” he said. “And the [United States] Postal Service is involved in the package business generally for very lightweight stuff that goes along with the mail.”
https://mitsloan.mit.edu/ideas-made-to-matter/fedex-founder-innovation-climate-change-and-amazon
Seeking Alpha love the stock and say its deeply discounted.
https://seekingalpha.com/article/4586327-deutsche-post-stock-q4-2022-earnings-still-bargain-reiterate-buy