VODAFONE GROUP LTD AS MAIN COMPANY, AND ORANGE, KPN AND DEUTSCHE TELEKOM (OR AN OTHER COMMUNICATION COMPANY) AS COMPETITORS
Use the company you chose in your accounting course (ACTG 631) or pick a company of your choice fitting the following characteristics:
- Trading on one major European exchange (Western or northern Europe and UK).
- Financial statements must have a published version in English
- A history of at least 5 years of dividend payments
NB: Should the company used in your accounting course not have paid dividends over the past 5 years then you must pick a different company.
Additional recommendation: the company must interest you (in other words, pick one where you could consider investing in).
You need to perform a set of different analyses:
1. Run a background analysis (industry, competitors, specific niches, products and services, recent history and news). The descriptive part should be minimal, while a larger portion should be devoted to explaining how the recent economical trends and competitive landscape surrounding the company have been used in your report to feed your assumptions (on growth, profitability, sustainability of current dynamics, etc.)
2. Use a Dividend discount model of your choice (justify choice and assumptions) and perform a valuation of the company. You need to perform a sensitivity analysis on your results on key variables (Justify your choices of variables).
3. Using the main competitors within industry (at least 3 companies), perform a relative valuation based on P/E, P/B, P/sales, P/EBIT and P/EBITDA. (comment your results)
4. Use at least two "value" criteria and explain why this company may (or not) be considered by a value investor. What is the maximum price (range) such an investor should accept to pay (based on the criteria chosen)
Your Final outcome is a printed note (Word format) to potential investors which includes a valuation range (including a description of the assumptions you used) with a description of the main strengths and/or weaknesses of the company. This note should end with a buy or sell recommendation based on your analyses and the current market price.
You will also upload your excel sheet on Studium with the details of your calculations.