Sunday, March 14, 2010

DOW JONES: Fundamental Analysis

During February and March, we have received the last balance sheets of the DOW JONES components. Using the statistics of Yahoo Finance and the information available in my broker, I made some relationships and comparisons between them. In addition, I compare the situation now and some periods ago. 

First, lets take a look to the Current Price / Book value relationship.  I am wondering why BA is so high, and the implications. AA, BAC, CVX, GE, DIS, JPM, KFT, T and TRV have good ratios.


Now, here we compare the beta of each stock. Notice that sectors like energy (XOM & CVX), consumer goods (KO, KFT, PG), Services (MCD & WMT), telecomunications (VZ & T) and drugs manufactures (PFE, MRK & JNJ) have the lowest. This are the "defensives" companies. 




Now that we have some idea about how this companies could react to the crisis, let's take a look on how they reacted until now. 

First, the revenues and the E.P.S.: MRK, T, PFE, MCD, PG, T, VZ and WMT were little affected. 



The E.P.S. growth vs. dividend growth (annual rate, from January 2007 to December 2009). It is interesting to notice the growth in the EPS of MRK, but this growth is not in relationship with the growth in dividend. Then, I would consider that an increase of dividends in MRK is something possible. MCD, PG, PFE and KFT are some companies in the same situation as MRK.



Revenue year over year (2009 vs 2008) and quarter over quarter (DEC/2009 vs SEP/2009). Notice that revenues from BA, HPQ, JNJ,, MCD, MRK, TRV, PFE, T and VZ were not affected.



Average annual  revenue, income and E.P.S. (2007 = 100%). I add up the revenue, income and E.P.S. of the 30 companies and divided by 30, to obtain an idea of this key numbers and their evolution during 2008 and 2009:




Average quarter revenue, income and E.P.S. (June 2009 = 100%):




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