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Last update on 2024-06-04

HeidelbergCement (HEI.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

HeidelbergCement Piotroski F-Score Analysis for 2023 evaluated on 9 criteria. Final Score: 8/9, displaying strong financial health and profitability.

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: 8

We're running HeidelbergCement (HEI.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?
1
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
1
Current Ratio is growing?
1
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
0

HeidelbergCement (HEI.DE) has been evaluated using the Piotroski F-Score model, which ranges between 0 to 9 and assesses a company's financial strength through 9 different criteria. The company has achieved a score of 8. This score evaluates the following: profitability with positive net income and cash flow, a rise in ROA, and operating cash flow surpassing net income; liquidity with a rising current ratio; and operational efficiency with an increased gross margin. However, the company showed a slight increase in leverage and a decrease in asset turnover.

Insights for Value Investors Seeking Stable Income

With a high Piotroski F-Score of 8, indicating robust financial health across multiple metrics such as profitability, liquidity, and operational efficiency, HeidelbergCement (HEI.DE) appears to be a strong investment opportunity. Potential investors should consider looking into this stock, despite the minor downsides, such as increased leverage and decreased asset turnover.

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

Profitability of HeidelbergCement (HEI.DE)

Company has a positive net income?

Net income represents the company's total earnings or profit, calculated as revenue minus expenses, taxes, and costs. It's vital for profitability analysis.

Historical Net Income of HeidelbergCement (HEI.DE)

HeidelbergCement (HEI.DE) posted a net income of €1,928,900,000 in 2023. Over the past 20 years, the company has experienced positive net income for 18 out of 21 years. This enduring profitability suggests robust financial health. For 2023, the positive net income adds 1 point in the Piotroski Analysis, affirming that the company continues to generate profits efficiently.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is a crucial indicator of a company's financial health, showing the amount of cash generated by regular business operations. Positive CFO signals robust operations, while negative CFO may suggest issues.

Historical Operating Cash Flow of HeidelbergCement (HEI.DE)

In 2023, HeidelbergCement's CFO stands at €3,205.1 million, up from €2,420.2 million in 2022. This positive trend underscores the company's strong operational performance. When reviewing the last 20 years, HeidelbergCement has consistently demonstrated robust CFO, with averages generally trending upwards. Notable low points, such as €660.2 million in 2003, contrast sharply with recent highs, illustrating an overall positive trajectory. Adding to their Piotroski score, a positive CFO in 2023 merits 1 point.

Return on Assets (ROA) are growing?

Change in ROA compares the Return on Assets in the current year versus the previous year. The criterion is met if the ratio increased, indicating improved profitability.

Historical change in Return on Assets (ROA) of HeidelbergCement (HEI.DE)

The Return on Assets (ROA) for HeidelbergCement increased from 0.0477 in 2022 to 0.0561 in 2023. This increase adds 1 point under the Piotroski Analysis criteria. A higher ROA indicates that the company is becoming more efficient at generating profit from its assets, showcasing a positive trend for the firm. Over the last 20 years, the ROA of HeidelbergCement has fluctuated but shows a progressive upward trend recently, aligning favorably above the long-term Industry Median ROA, which oscillates around 0.3. This shift hints towards the company's robust operational activities and better asset management strategies compared to its peers.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income compares a company's cash flow from operations with its net income, indicating liquidity and earnings quality.

Historical accruals of HeidelbergCement (HEI.DE)

For HeidelbergCement in 2023, the Operating Cash Flow stands at €3.205 billion, significantly higher than its Net Income of €1.928 billion. This places 1 point for this criterion and highlights a strong capacity to generate cash, suggesting high earnings quality and robust liquidity. While net income indicates profitability, the operating cash flow, outstripping net income, suggests efficient income conversion into actual cash flow. Historical data corroborates the upward trend since 2017, marking sound financial health and resilience through economic cycles.

Liquidity of HeidelbergCement (HEI.DE)

Leverage is declining?

Change in leverage involves comparing the company's debt levels between two periods. It's important to assess how the company's leverage has changed as it can indicate shifts in financial stability and risk.

Historical leverage of HeidelbergCement (HEI.DE)

The leverage of HeidelbergCement increased from 0.186 in 2022 to 0.1785 in 2023, which translates to a rise in leverage. Over the last 20 years, leverage has shown significant fluctuations, with peaks in 2016 and 2020. The recent increase in leverage is a negative indicator for Piotroski's F-Score, therefore, this criterion scores 0 points.

Current Ratio is growing?

Current Ratio measures a company's ability to pay short-term obligations with its current assets. It is a critical measure of liquidity.

Historical Current Ratio of HeidelbergCement (HEI.DE)

For HeidelbergCement, the Current Ratio increased from 1.1582 in 2022 to 1.1947 in 2023, which points to a slight improvement in liquidity. This overall increase signifies a marginal enhancement in the company's ability to meet short-term liabilities using its near-term resources. Given this increase, it's prudent to assign 1 point based on Piotroski's criterion. Historically, analyzing HeidelbergCement's current ratio over the past two decades, we see fluctuating values, peaking around 1.3751 in 2010 and dipping to 0.8932 in 2006. However, the company's current ratio has been generally aligned below the industry median of 1.6879 in 2023, reflecting industry constraints and the unique operational challenges that HeidelbergCement may face. Despite this, the year-on-year increase is a positive indicator.

Number of shares not diluted?

Change in Shares Outstanding is a vital measure to gauge whether a company is diluting its equity base or consolidating. It's crucial for understanding capital structure and shareholder value.

Historical outstanding shares of HeidelbergCement (HEI.DE)

In 2023, the Outstanding Shares for HeidelbergCement (HEI.DE) decreased to 185,008,000 from 189,028,000 in 2022. Thus, the share count fell by 4,020,000 shares, indicating a positive effort towards equity consolidation. Historically, the highest share count was 198,416,000 in 2015-2019, suggesting a trend of stabilizing or reducing shares in recent years, which is beneficial for shareholders.

Operating of HeidelbergCement (HEI.DE)

Cross Margin is growing?

Gross Margin is the difference between revenue and cost of goods sold divided by revenue. It indicates the efficiency of a company in managing its core expenses relative to sales and provides insight into financial health and competitive edge.

Historical gross margin of HeidelbergCement (HEI.DE)

In the case of HeidelbergCement (HEI.DE), the Gross Margin increased from 0.5892 in 2022 to 0.6208 in 2023, indicating improved efficiency in controlling production costs relative to sales. This upward trend in Gross Margin indicates a stronger performance, contributing positively to the company's profitability. As a result, 1 point is added. Notably, comparing it to the industry median Gross Margin of 0.3214 in 2023, HeidelbergCement significantly outperforms its peers, emphasizing its efficient cost management in comparison with the broader industry.

Asset Turnover Ratio is growing?

Change in Asset Turnover for HeidelbergCement is important to analyze the efficiency with which the company is using its assets to generate revenue.

Historical asset turnover ratio of HeidelbergCement (HEI.DE)

In 2022, HeidelbergCement's asset turnover ratio was 0.63, and in 2023 it slightly decreased to 0.6163. This indicates that the company is generating slightly less revenue per unit of asset held, which is a negative trend, leading to a score of 0 points in this criterion. Comparing the last 20 years, the ratio has fluctuated, peaking at 0.7614 in 2006 and hitting a low of 0.4293 in 2009. Such variances reflect the company’s operational challenges and market conditions over time.


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