DHL.DE 40.58 (-0.71%)
DE0005552004TransportationIntegrated Freight & Logistics

Last update on 2024-06-04

Deutsche Post (DHL.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 4/9)

Deutsche Post (DHL.DE) Piotroski F-Score analysis for 2023 reveals a score of 4/9, evaluating financial health and investment potential.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 4

We're running Deutsche Post (DHL.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
0
Number of shares not diluted?
1
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

The Piotroski F-Score is a metric used to evaluate a company's financial strength, ranging from 0 to 9 based on specific criteria. Deutsche Post (DHL.DE) achieved a score of 4, which is relatively low. The analysis covers nine aspects: profitability, liquidity, and operating efficiency. Deutsche Post has shown positive net income and cash flow, helping its score. However, the company struggled with decreasing Return on Assets (ROA), increased leverage, a declining current ratio, and diminished gross margin and asset turnover. The reduction in outstanding shares was a positive indication. Overall, while there are some strengths, the weaknesses are notable.

Insights for Value Investors Seeking Stable Income

Given that Deutsche Post (DHL.DE) achieved a low Piotroski score of 4 out of 9, it suggests financial instability in various areas despite some positive indicators like net income and cash flow. Increasing leverage and liquidity issues alongside declining profitability metrics warn potential investors to be cautious. It may be worth looking into for its positive aspects, but only if willing to risk the financial inconsistencies highlighted.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Deutsche Post (DHL.DE)

Company has a positive net income?

An analysis of the net income criterion checks if a company has reported a positive net income, which reflects its profitability. This is crucial as consistent profitability is a key indicator of financial health.

Historical Net Income of Deutsche Post (DHL.DE)

Deutsche Post (DHL.DE) has reported a net income of €3.677 billion in 2023, which signifies a positive net income. Over the past 20 years, Deutsche Post's net income has shown substantial growth and resilience, despite some fluctuations. Notably, in 2008, the company reported a negative net income of -€1.979 billion, but it quickly bounced back in the following years. This positive net income trend in 2023 reinforces the company's strong financial standing and operational efficiency. Therefore, this criterion adds 1 point.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is the cash generated by a company’s regular operating activities. It is a critical measure of financial performance as it indicates the company’s ability to generate sufficient cash flow to maintain operations and grow.

Historical Operating Cash Flow of Deutsche Post (DHL.DE)

For Deutsche Post (DHL.DE), the cash flow from operations (CFO) in 2023 is 9,258,000,000, which is positive. Over the last 20 years, the cash flow from operations has generally been positive, except for a few years such as 2009 and 2012, which saw negative cash flows. The positive CFO in 2023 is a strong indicator of healthy operational practices. Thus, based on the Piotroski criteria, Deutsche Post scores 1 point for CFO in 2023.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company’s profitability relative to its total assets. It indicates how efficiently management is using the company’s assets to generate earnings. A higher ROA suggests efficient use of assets.

Historical change in Return on Assets (ROA) of Deutsche Post (DHL.DE)

The ROA for Deutsche Post (DHL.DE) decreased from 0.0812 in 2022 to 0.0544 in 2023. This trend, unfortunately, does not attract a point according to Piotroski’s F-score criteria. Examining historical data, we observe that Deutsche Post’s operating cash flow has shown significant variances over the last 20 years. Despite the impressive cash flow of €10.97 billion in 2021, ROA in 2022 is lower, suggesting performance issues or higher asset bases affecting returns. A comparison with industry median ROA, consistently ranging lower than DHL's historical trends (e.g., 0.1817 in 2023), further reveals cyclical performance fluctuations within logistics, impacting profitability. Therefore, detrimental ROA in 2023 is subsequent to higher asset investments or operational inefficiencies, aligning poorly against Piotroski’s profitability metrics.

Operating Cashflow are higher than Netincome?

Explain the criterion for Deutsche Post (DHL.DE) and why it is important to consider

Historical accruals of Deutsche Post (DHL.DE)

The operating cash flow is an indicator of a company's ability to generate cash from its core operational activities. When it is higher than net income, it suggests that the company has robust cash-generative capabilities, free from non-cash accounting adjustments. This is important because companies that generate healthy operating cash flow compared to net income are generally considered to have strong financial health and operational efficiency.

Liquidity of Deutsche Post (DHL.DE)

Leverage is declining?

Change in Leverage assesses whether a company has become more reliant on debt to finance its activities. A decrease in leverage is generally perceived as positive, reflecting lower financial risk.

Historical leverage of Deutsche Post (DHL.DE)

In 2023, Deutsche Post's leverage increased to 0.2634 from 0.2532 in 2022, representing a rise of approximately 4.03%. This trend points toward higher financial risk as the company becomes slightly more reliant on debt. Over the last 20 years, it is evident that the leverage ratio has fluctuated, reaching higher levels particularly in recent years. Given this increase in 2023, no point is awarded under the Piotroski F-Score for the Change in Leverage criterion.

Current Ratio is growing?

The Current Ratio measures a company's ability to pay short-term obligations with its current assets and is crucial for evaluating liquidity.

Historical Current Ratio of Deutsche Post (DHL.DE)

The Current Ratio for Deutsche Post (DHL.DE) has decreased from 1.0031 in 2022 to 0.9454 in 2023, indicating a reduction in liquidity. A ratio below 1 suggests the company might have difficulties meeting its short-term liabilities using its current assets. Historically, their Current Ratio has fluctuated, hitting lows of 0.8921 in 2019 and highs of 1.0501 in 2020. Comparatively, the industry median current ratio for 2023 stands at 1.1884, which highlights that Deutsche Post is underperforming relative to its peers. Therefore, this negative trend in current ratio does not warrant adding a point.

Number of shares not diluted?

Explains the importance of evaluating the change in shares outstanding for Deutsche Post (DHL.DE).

Historical outstanding shares of Deutsche Post (DHL.DE)

Let's analyze the change in outstanding shares for Deutsche Post over the specified period. In 2022, the outstanding shares were 1,214,024,931, compared to 1,188,885,217 in 2023. This indicates a decrease in shares. For Piotroski's criteria, a decrease in shares outstanding results in awarding 1 point. The trend is positive in this context, as fewer shares mean potential value distribution among a smaller number of shares.

Operating of Deutsche Post (DHL.DE)

Cross Margin is growing?

The change in Gross Margin measures a company's ability to maintain or improve its profitability from its core activities. It's important because it reflects how well the company controls its production costs and pricing strategy relative to sales.

Historical gross margin of Deutsche Post (DHL.DE)

In 2023, Deutsche Post's (DHL.DE) Gross Margin stood at 0.1739, slightly down from 0.1752 in 2022. This marginal decline indicates that the company faced challenges either in controlling its production costs or its pricing did not keep pace with cost increases. Given that the Gross Margin has decreased, we assign 0 points to this criterion under the Piotroski score. Over the past two decades, DHL has seen a notable decline in its Gross Margin from a high of around 0.5385 in 2003, stabilizing near industry medians in recent years. This trend underscores the competitive and operational pressures in the logistics and postal service industry.

Asset Turnover Ratio is growing?

Change in Asset Turnover measures the company's efficiency at using its assets to generate sales. A higher asset turnover indicates better performance.

Historical asset turnover ratio of Deutsche Post (DHL.DE)

In 2022, Deutsche Post had an Asset Turnover ratio of 1.4301, which decreased to 1.2086 in 2023. This decline signifies a reduction in the company’s efficiency to convert assets into revenue. Over the past 20 years, asset turnover ranged from 0.252 to 1.5829, peaking in 2013. Thus, the 2023 figure is near the lower end of the historical spectrum, reflecting worsened asset utilization. Consequently, no point is added for this criterion.


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