January 11, 2024
Top 10 Stock KBC Hold 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: KBC – Top 10 Stock in Belgian 20 Index BEL20
KBC is listed as a top 10 stock on January 11, 2024 in the market index BEL20 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 34 (34% performer), Obermatt assesses an overall hold recommendation for KBC on January 11, 2024.
Snapshot: Obermatt Ranks
| Country | Belgium |
| Industry | Diversified Banks |
| Index | BEL20, Diversity Europe, Human Rights, Renewables Users, SDG 12, SDG 13, SDG 3, SDG 7, SDG 8 |
| Size class | XX-Large |
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° View KBC Hold
| 360 METRICS | January 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 46 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 6 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 76 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 39 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 34 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 34 (better than 34% compared with alternatives), overall professional sentiment and financial characteristics for the stock KBC are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for KBC. The only rank that is above average is the consolidated Safety Rank at 76, which means that the company has a financing structure that is safer than those of 76% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 46, which means that the share price of KBC is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 6, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 39, which means that professional investors are more pessimistic about the stock than for 61% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 34, KBC is worse than 66% of all alternative stock investment opportunities based on the Obermatt Method. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 39. The negative market view on KBC may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for KBC only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 39 (better than 39% compared with alternatives), overall professional sentiment and engagement for the stock KBC is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for KBC. Analyst Opinions are at a rank of 21 (worse than 79% 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 89 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 KBC. Market Pulse is also positive with a rank of 78, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 78% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 14, which means that professional investors hold less stock in this company than in 86% 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 a consolidated Sentiment Rank of 39 (less encouraging than 61% compared with investment alternatives), KBC has a reputation among professional investors that is below 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 the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: KBC Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 46 (worse than 54% compared with alternatives), KBC shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for KBC. Price-to-Sales (P/S) is 51, which means that the stock price compared with what market professionals expect for future sales is lower than for 51% of comparable companies, indicating a good value concerning KBC's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 74, which means that dividends are expected to be higher than for 74% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 66% of alternatives (only 34% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 57% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 46, is a hold recommendation based on KBC's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: KBC Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 6 (better than 6% compared with alternatives), KBC shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for KBC. Sales Growth has a rank of 33, which means that currently professionals expect the company to grow less than 67% of its competitors. The same is valid for Profit Growth, with a rank of 28, and Capital Growth with 17. In addition, Stock Returns have a below market rank of 24, which means that the stock returns have recently been below 76% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 6, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: KBC Debt Financing Safety very solid
| SAFETY METRICS | January 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 54 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 69 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 47 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 76 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 76 (better than 76% compared with alternatives) for 2024, the company KBC has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of KBC is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for KBC.Leverage is at 54, meaning the company has a below-average debt-to-equity ratio. It has less debt than 54% of its competitors.Refinancing is at a rank of 69, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 69% of its competitors. Liquidity is at 47, meaning that the company generates less profit to service its debt than 53% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 76 (better than 76% compared with alternatives), KBC has a financing structure that is significantly safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: KBC Below-Average Financial Performance
| COMBINED PERFORMANCE | January 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 46 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 6 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 47 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 34 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 34 (worse than 66% compared with investment alternatives), KBC (Diversified Banks, Belgium) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of KBC are low in value (priced high) with a consolidated Value Rank of 46 (worse than 54% of alternatives) and show below-average growth (Growth Rank of 6) but are safely financed (Safety Rank of 76), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 34, is a hold recommendation based on KBC's financial characteristics. As the company KBC's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 46) and low growth (Obermatt Growth Rank of 6), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 76) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.