SM Wirtschaftsberatungs AG engages in the investment, rental, and management of residential properties in Germany. The company was founded in 1996 and is based in Sindelfingen, Germany.

Germany

SM Wirtschaftsberatungs AG

Real Estate

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, and there is an evident trend. In the past 12 months, the dividend yield has been outstanding and can be rated excellent compared to its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. On average, the company pays dividends annually. 

SMWN.DE reported revenue of USD 0mn in the last 12 months, down 11% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 38% from FY23 to USD -0.22.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 17ppts over six months and grown 2ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

Historically, SMWN.DE has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -227.7%, down from -163.9% in FY22. 

In the last 12 months, the return on capital employed (RoCE) declined to -4.6%, below the peers. 

Another important profitability metric, return on assets (RoA), amounted to -4.4% in the last 12 months, a decrease from -2.8% in FY22. 

SM Wirtschaftsberatungs AG reported a return on equity (RoE) of -5.1% in the last 12 months, down from -3.3% in FY22. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.4 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

SMWN.DE has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, negligible return on capital, excessive margin volatility, and poor cash flow generation. We note robust profitability and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, SMWN.DE is as volatile as an index. In other words, the stock will move with the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be limited. 

In normal market circumstances, SMWN.DE is not overly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will remain relatively stable. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

Considering past and projected metrics, the stock is distinctly 'expensive' compared to its peers. Specifically, the stock is overvalued on EV/EBITDA. 

SM Wirtschaftsberatungs AG

€ 4.8

3

SM Wirtschaftsberatungs AG

€ 4.8

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

€ 4.8

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