D.he Deutsche Bundespost, as the then state-owned post, logistics and telecommunications company, was divided into three public limited companies under private law: Deutsche Post AG, Deutsche Telekom AG and Deutsche Postbank AG. While the former went public with its T-share in November 1996 and was partially privatized, it was only four years later for the “yellow post”, in November 2000.
Deutsche Post AG’s IPO was the largest IPO of the millennium in Germany and the third largest in the world. In the beginning, a total of 29 percent of Deutsche Post’s share capital was sold. There was an eight-fold oversubscription of the shares offered at the IPO. Two years later, the Post Group took over 100 percent of DHL Worldwide Express and today’s logistics group was created.
Anyone who has been a Post shareholder for 20 years has experienced a lot with this share. Anyone who accessed the opening price of EUR 21.40 at the time and holds the share to this day only sees a return of a little more than 80 percent. This only results in a small price gain averaging three percent per year. Considered soberly: A successful share story feels different in the portfolio.
However, a look at the current chart will put many of the existing shareholders in a mild mood. Today, the Deutsche Post DHL Group is one of the world’s leading logistics groups, presenting itself as one of the beneficiaries of digitization during the corona crisis and continuously increasing sales, especially with the DHL business.
Beneficiary of the online shopping wave
In the next week the online shopping wave in the run-up to Christmas will be ushered in with “Black Friday” and “Cyber Monday”. In addition to online retailers, logistics companies will also have a lot to do – it is the “main shopping season”. This year, given the corona pandemic, this is likely to be even greater than in previous years.
For example, shareholders of Deutsche Post can relax and watch the hustle and bustle and rub their hands at the same time. Because experts expect unprecedented shipment volumes. More than 400 million parcels are to be sent in Germany in November and December.
DHL Express is assuming an all-time high in global online retail. After the e-commerce volume in the DHL Express network has already increased by around 35 percent in the course of the current financial year, the shipment volumes in the coming main shopping season are expected to exceed the previous year’s period by more than 50 percent, according to the assessment.
The pandemic is making it possible, the shift in shopping to the online world has gotten a boost this year. “From the perspective of e-commerce, you could even say that COVID-19 in 2020 means that we will be at the level of 2030”, is the assessment of DHL Express Manager Michiel Greeven.
Quarterly forecast increased
For the global group Deutsche Post, this means that the fourth quarter should be a good one and the DAX company can build on the good figures of the previous quarter. The logistics group was able to increase its sales by 4.4 percent to 16.2 billion euros compared to the same quarter of the previous year. Organically (adjusted for portfolio and exchange rate effects), sales growth was as much as 9.0 percent. The group increased its operating result (EBIT) in the third quarter by around 50 percent compared to the previous year to 1.4 billion euros and the EBIT margin climbed from 6.1 percent to 8.5 percent. The group, which employs 550,000 people in over 220 countries, has increased its forecast for the fourth quarter accordingly.
This is good news for the shareholders, who can celebrate the milestone birthday of the Post share on Friday. The majority of the analysis houses see the logistics share as a worth buying paper, or one that should definitely be topped up in the depot. The analysts at DZ-Bank and Barclays had recently raised the price target to 48 euros after the latest balance sheet publication.
The Post share is a security that many long-term investors have in their portfolio. Not an “exciting” share, but one that has quietly more than tripled in at least the past ten years and has been paying shareholders a steady dividend for many years. The dividend yield is currently over 3 percent.
As with almost all securities, postal investors also needed strong nerves this year. After the Deutsche Post share had slipped 45 percent back to a peak of around EUR 19 in the first quarter, the prices began to climb again. In the course of the new price rally, the share price more than doubled in the following eight months. At the beginning of November the share hit a record high at EUR 43.50. Despite the recent setback to temporarily to 39 euros, the long-term upward trend is intact.
In view of the latest developments in the area of corona vaccines, the Post Group is likely to achieve further sales increases in the next few quarters. Because the global logistics industry is preparing for the global distribution of corona vaccines that could hit the market in the next few months. The German logistics giant is likely to get a large piece of the cake from it.