May 11, 2023
Top 10 Stock Akzo Nobel Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Akzo Nobel – Top 10 Stock in AEX Index
Akzo Nobel is listed as a top 10 stock on May 11, 2023 in the market index AEX because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average, and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° Rank of 59 (high 59% performer), Obermatt assesses an overall buy recommendation for Akzo Nobel on May 11, 2023.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment Akzo Nobel Buy
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 85 |
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| SAFETY | ||||||||
| SAFETY | 4 |
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| SENTIMENT | ||||||||
| SENTIMENT | 75 |
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| 360° VIEW | ||||||||
| 360° VIEW | 59 |
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ANALYSIS: With an Obermatt 360° Rank of 59 (better than 59% compared with alternatives), overall professional sentiment and engagement for the stock Akzo Nobel are above average. The 360° Rank is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Akzo Nobel. The consolidated Growth Rank has a good rank of 85, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 85% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 75, which means that professional investors are more optimistic about the stock than for 75% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 49, which means that the share price of Akzo Nobel is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 51% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 4, which means that the company has a financing structure that is riskier than 96% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° Rank of 59, Akzo Nobel is better than 59% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 85), and professional market sentiment is positive (Sentiment Rank of 75), but value and safety are below average. The Safety Rank is the least important of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take one minus the growth rank, that is the minimum level that the value rank should have. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). Sometimes market sentiment just extrapolates the past, but sometimes they are right. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Akzo Nobel very positive
ANALYSIS: With an Obermatt Sentiment Rank of 75 (better than 75% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Akzo Nobel is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for Akzo Nobel. Analyst Opinions are at a rank of 43 (worse than 57% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 97 which means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in Akzo Nobel. Market Pulse is also positive with a rank of 61, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 61% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 39, which means that professional investors hold less stock in this company than in 61% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 75 (more positive than 75% compared with investment alternatives), Akzo Nobel has a reputation among professional investors that is significantly higher than that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or is getting less expensive for what they are. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: Akzo Nobel Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Akzo Nobel shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Akzo Nobel. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 61% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales has a value of 48 which means that the stock price compared with what market professionals expect for future profits is higher than 52% of comparable companies, indicating a low value concerning Akzo Nobel's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 47 which means that the stock price compared with what market professionals expect for future profit levels is higher than 53% of comparable companies. In addition, Price-to-Book Capital (also referred to as market-to-book ratio) with an Obermatt Price-to-Book Rank of 31 is also low. Compared with invested capital, the stock price is higher than for 69% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a HOLD recommendation based on Akzo Nobel's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Akzo Nobel? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Akzo Nobel only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Akzo Nobel Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 85 (better than 85% compared with alternatives) for 2023, Akzo Nobel shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Akzo Nobel. Profit Growth has a rank of 87 which means that currently professionals expect the company to grow its profits more than 87% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 69, and Stock Returns has a rank of 65 which means that the stock returns have recently been above 65% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 32 (68% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 85, is a BUY recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Akzo Nobel Debt Financing Safety risky
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 3 |
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| REFINANCING | ||||||||
| REFINANCING | 12 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 30 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 4 |
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ANALYSIS: With an Obermatt Safety Rank of 4 (better than 4% compared with alternatives), the company Akzo Nobel has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Akzo Nobel is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Akzo Nobel. Liquidity is at 30, meaning that the company generates less profit to service its debt than 70% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 3, meaning the company has an above-average debt-to-equity ratio. It has more debt than 97% of its competitors. Finally, Refinancing is at a rank of 12 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 88% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 4 (worse than 96% compared with alternatives), Akzo Nobel has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. ...read more
Combined financial peformance: Akzo Nobel Below-Average Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 85 |
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| SAFETY | ||||||||
| SAFETY | 30 |
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| COMBINED | ||||||||
| COMBINED | 49 |
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ANALYSIS: With an Obermatt Combined Rank of 49 (worse than 51% compared with investment alternatives), Akzo Nobel (Specialty Chemicals, Netherlands) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Akzo Nobel are low in value (priced high) with a consolidated Obermatt Value Rank of 49 (worse than 51% of alternatives), and are riskily financed (Safety Rank of 4, which means above-average debt burdens) but show above-average growth (Growth Rank of 85). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 49, is a hold recommendation based on Akzo Nobel's financial characteristics. As the company Akzo Nobel shows low value with an Obermatt Value Rank of 49 (51% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 85% of comparable companies (Obermatt Growth Rank is 85). This is a typical case. Companies with above average growth tend to cost more than the sluggish variety. If this is a high-growth company, the low Obermatt Safety Rank of 4 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Akzo Nobel, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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