BASF: 150 Years Old Quality Company With An 8% Dividend Yield

Summary

• BASF is down about 40% YTD and now trades at a highly attractive risk/reward level.
• BASF is a diversified chemical company with headquarters in Germany.
• The one-year forward EV/EBITDA is as low as x5.8. Moreover, BASF's 8% dividend yield appears sustainable and should provide a possible floor to further downside.
• BASF is clearly undervalued—in my opinion and accumulating an equity position at prices < $12 appears justified.
• Personally, I value BASF at $14.73/share. I anchor my valuation on a residual earnings framework and EPS analyst consensus estimates.

Kannan D

Thesis

BASF (OTCQX:BASFY) is down about 40% YTD and now trades at a highly attractive risk/reward level. For reference, the one-year forward P/E is x8 and the EV/EBITDA is as low as x5.8. Moreover, BASF's 8% dividend yield appears sustainable and

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

not financial advise