October 12, 2023
Top 10 Stock Wartsila 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: Wartsila – Top 10 Stock in Dividend Champions Europe
Wartsila is listed as a top 10 stock on October 12, 2023 in the market index Dividends Europe 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 growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 42 (42% performer), Obermatt assesses an overall hold recommendation for Wartsila on October 12, 2023.
Snapshot: Obermatt Ranks
| Country | Finland |
| Industry | Industrial Machinery |
| Index | OMX 25, Dividends Europe, Human Rights, Water Tech |
| Size class | X-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 Wartsila Hold
| 360 METRICS | October 12, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 39 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 38 |
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| SENTIMENT | ||||||||
| SENTIMENT | 18 |
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| 360° VIEW | ||||||||
| 360° VIEW | 42 |
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ANALYSIS: With an Obermatt 360° View of 42 (better than 42% compared with alternatives), overall professional sentiment and financial characteristics for the stock Wartsila are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Wartsila. The consolidated Growth Rank has a good rank of 97, 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. It ranks higher than 97% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 39 means that the share price of Wartsila is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 61% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 38, which means that the company has a riskier financing structure than 62% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 18, indicating professional investors are more pessimistic about the stock than for 82% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 42, Wartsila is worse than 58% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 97), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 18), the company is rather risky when it comes to financing (Safety Rank of 38). The negative market view on Wartsila may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Wartsila compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. 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). 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. ...read more
Sentiment Strategy: Professional Market Sentiment for Wartsila negative
ANALYSIS: With an Obermatt Sentiment Rank of 18 (better than 18% compared with alternatives), overall professional sentiment and engagement for the stock Wartsila is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Wartsila. Analyst Opinions are at a rank of 18 (worse than 82% 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 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Wartsila. More encouragingly, the Professional Investors rank is 67, which means that professional investors hold more stock in this company than in 67% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 14, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 86% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 18 (less encouraging than 82% compared with investment alternatives), Wartsila has a reputation among professional investors that is far below that of its competitors. The sentiment signals are mixed for Wartsila. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Wartsila Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 39 (worse than 61% compared with alternatives), Wartsila 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 Wartsila. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 67% 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 is 42 which means that the stock price compared with what market professionals expect for future profits is higher than 58% of comparable companies, indicating a low value concerning Wartsila's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 26 which means that the stock price compared with what market professionals expect for future profit levels is higher than 74% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 29 is also low. Compared with invested capital, the stock price is higher than for 71% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 39, is a hold recommendation based on Wartsila's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Wartsila? 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 Wartsila only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Wartsila Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 97 (better than 97% compared with alternatives) for 2023, Wartsila 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 Wartsila. Sales Growth has a rank of 86 which means that currently, professionals expect the company to grow more than 86% of its competitors. Both Profit Growth, with a rank of 64, and Stock Returns, with a rank of 95, are also above average. But Capital Growth only has a rank of 48, which means that, currently, professionals expect the company to grow its invested capital less than 52% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 97, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Wartsila Debt Financing Safety below-average
| SAFETY METRICS | October 12, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 53 |
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| REFINANCING | ||||||||
| REFINANCING | 32 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 43 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 38 |
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ANALYSIS: With an Obermatt Safety Rank of 38 (better than 38% compared with alternatives), the company Wartsila has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Wartsila 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 just one indicator above average for Wartsila and the other two below average. Leverage is at a rank of 53 meaning the company has a below-average debt-to-equity ratio. It has less debt than 53% of its competitors.Refinancing is at a rank of 32, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 68% of its competitors. Liquidity is at a rank of 43, meaning that the company generates less profit to service its debt than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 38 (worse than 62% compared with alternatives), Wartsila has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Wartsila are on the safer side. ...read more
Combined financial peformance: Wartsila Above-Average Financial Performance
| COMBINED PERFORMANCE | October 12, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 39 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 43 |
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| COMBINED | ||||||||
| COMBINED | 60 |
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ANALYSIS: With an Obermatt Combined Rank of 60 (better than 60% compared with investment alternatives), Wartsila (Industrial Machinery, Finland) shares have above-average financial characteristics compared with similar stocks. Shares of Wartsila are low in value (priced high) with a consolidated Value Rank of 39 (worse than 61% of alternatives), and are riskily financed (Safety Rank of 38, which means above-average debt burdens) but show above-average growth (Growth Rank of 97). ...read more
RECOMMENDATION: A Combined Rank of 60, is a buy recommendation based on Wartsila's financial characteristics. As the company Wartsila shows low value with an Obermatt Value Rank of 39 (61% 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 97% of comparable companies (Obermatt Growth Rank is 97). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 38 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 Wartsila, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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