Fresenius SE

Business model:

Healthcare group, provides products and services for dialysis, hospitals, and outpatient medical care worldwide. The company operates through four segments: Fresenius Medical Care, Fresenius Kabi, Fresenius Helios, and Fresenius Vamed.

Current price €36 (19.2.21)

PE: 12 (2020); 8.9e (2023) – low

PCF: 4 (2020); 3.8e (2021) – very low (undervalued?)

ROIC: 6.6 (Q1-3 2020) – quite low

Current Dividend Yield: 2.4% (Historical high with payout ratio of 25%); Dividend Growth last 10 years 13%

Market cap: € 20B

EV: € 36B

Piotroski F-Score: 3

Altman Z Score 1.08 (stress)

DCF valuation:

  • Present value: €56 (mixed scenario); Discount rate 8%; margin of safety 36%.
  • Present value: €65 (best case scenario: 5% annual growth next 5 years increasing to 9% year 6-10). Discount rate 8%.
  • Present value: €74 (mixed scenario) with discount rate 2% (market rates for Fresenius Corporate bonds are currently below 1%).

Fresenius SE seems undervalued from a financial perspective with most metrics below historical averages.


European Dividend Aristocrat

Safe Dividend (Low payout)

Moat Business

Defensive Industry (Non Cyclical)

Could be spin off entities

Expansion in EM and China

Strong cash flow

Low valuation vs. Peers

High margin of safety for non cyclical business in defensive industry.


Regulator and political

High Debt (had similar periods of higher debt level in the past and managed it well e.G. 2008/09)

Covid (associated costs and fewer higher margin treatments)

Holding FMC business model depending on dialysis and new treatments will be found.

Disclosure: I’m long Fresenius. No investment advice.


Price target analysts:

Berenberg: €55.95

Update 16.3.:

Please find here a less bullish recent analysis from Sven Carlin about Fresenius:

Update 17.4.2021:

There is a potential that Fresenius is planning/preparing a spin-off of their Kabi business unit which could create additional value. The new Kabi CEO Sen brings some experience in this area and the Fresenius CEO is looking into restructuring the business to create value.

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