Wow! This stock with a P / E of 12 and 4% dividend yield continues to grow moderately!

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A stock that has a price-earnings ratio of 12 and continues to grow moderately is, according to some rules of value investors, a real snapper. Of course, even a dividend yield of 4% or more may be an exciting addition in this context, especially if that payout is stable. However, many things still revolve around value for value investors.

A stock that could now be cheap by this definition would be the alliance. With a 2018 earnings per share in the amount of 17.43 euros, the insurer at the current price level of 223.40 euros (08.11.2019, early trading) would be at about such a value. In addition, the 2018 dividend of € 9.00 at such a price level would correspond to a dividend yield of just over 4%.

The best, however, in the context of Allianz: the growth of the DAX insurer remains consistent and constant this year. So let's take a look at a few recent numbers.

Constance in Q3, growth to nine months!

As we can see from a glance at the first nine months, growth continued here. For example, during this period, Allianz increased sales by 7.8% to EUR 106.9 billion. In contrast, the operating result increased by 4.2% to EUR 9.1 billion, with earnings per share of EUR 14.44 below the line remaining around 7.8% more than in the same period of the previous year. Thus, we can probably draw a conclusion in this financial year so far: the alliance continues to grow in the mid to higher single-digit percentage range.

Some investors may come up against it in the coming days that the growth in the third quarter has rather escaped and has stagnated. Although sales still rose by 8.1% during this period, operating profit even fell slightly by 0.1% to EUR 2.98 billion. Nonetheless, such fluctuations can often occur, especially with insurers, and investors are well advised these days to look at the big picture rather than the small outlook for three months.

In addition, investors should not forget that the alliance continues to stick to the current forecasts. Management still expects earnings of 11.5 billion euros, plus / minus the usual 500 million euros. Where the Allianz has noted in the context of the current reporting season, this value, even in view of the previously achieved € 9.1 billion, probably more likely to play in the upper range of this forecast.

That means this growth for the dividend

So, all in all, there really seems to be much to suggest that Allianz will continue its operating growth path. Possibly not as rapid as in the first half of the year, but even more so, as the management announced at the end of last year, according to its own forecasts.

Also for fans of the capital repatriations of Munich reinsurer could be imminent golden times. Finally, Allianz plans to distribute 50% of profits in dividends to investors, in accordance with its dividend policy. With an increase in earnings of currently 7.8% from the point of view of every single share, rising dividends are likely to linger next year.

How high these will be in the end, of course, remains a mystery. As well as the question of whether Allianz will provide further funds for share buybacks in the coming year or whether the other surpluses will hold more for acquisitions and acquisitions. Nonetheless, investors are likely to enjoy another billion rainfall here next year. At least the current quarterly figures point to it quite clearly.

Exciting, solid numbers

All in all, Allianz has presented exciting figures that underlined its further growth course. However, a bigger surprise or an outstanding success did not happen.

However, given the currently potentially inexpensive valuation, consistency and long-term, moderate growth could suffice to provide solid returns and capital repatriations. An investment case that you may well think about as an investor.

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Vincent owns Allianz shares. The Motley Fool does not own any of the stocks mentioned.

Motley Fool Germany 2019

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