40% CORRECTION for Siemens Energy? Buy recommendation for BYD and an opportunity with dividend gem RE Royalties!

RE Royalties: Potential for Rising Share Prices

High dividend yield and perceived undervaluation in a single stock—this is the case with RE Royalties. Investors interested in this opportunity may want to mark May 20, 2026, in their calendars and register for the virtual IIF investor conference. That is where Peter Leighton, COO of RE Royalties, is expected to provide an interesting update. The company has signalled that it no longer intends to accept its current valuation and announced concrete measures at the end of March. The stated objective is to enhance shareholder value. To this end, all options are being considered, including partnerships and new financing structures, as well as a potential sale of the entire company.

Management's frustration with the current share price is understandable. Although the stock of the company, which specializes in financing renewable energy projects, has risen by around 40% this year, the dividend yield remains above 10%. The share is currently trading at CAD 0.35. Last year, a dividend of CAD 0.04 was paid, and so far there is no indication that this level would not be maintained this year. The business model is expected to remain in demand: project developers receive capital from RE Royalties without giving up any equity. In return, the company receives a share of future revenues. RE Royalties focuses exclusively on proven technologies such as solar, wind, hydropower, and energy storage, often in the United States. As a result, it benefits indirectly from the energy demand driven by the AI boom. The company has recently indicated that its potential project pipeline could reach up to CAD 200 million. By comparison, RE Royalties' market capitalization is below CAD 20 million.

Consequently, the management's presentation at the IIF on May 20, 2026, is likely to be extremely interesting unless the stock price rises beforehand.

Siemens Energy: Over 40% downside potential?

While RE Royalties' core business is booming, its stock price is faltering. At Siemens Energy, both are doing well. A few days ago, the stock shot past EUR 190, marking a new all-time high. It is hard to believe that the stock could be bought for under EUR 10 at the end of 2023. At that time, however, the company was also facing the threat of insolvency. Today, the group is raking in a fortune thanks to the AI boom.

However, from mwb research's perspective, Siemens Energy's stock is now also being "gilded" on the stock market. Therefore, even after the upward revision of the annual forecast as part of the quarterly results, they are sticking to their "Sell" recommendation. They see the fair value of Siemens Energy shares at EUR 100. To reach this level, the stock would have to plummet by 44%.

To find weaknesses in the quarterly results, analysts had to dig deep into the details. In particular, order intake and cash flow performed better than expected, but revenue fell slightly short of market estimates.

Within the segments, the picture was mixed for the mwb analysts. The Gas Services division remained the key growth driver, with sharply rising order intake and robust cash flow. Grid Technologies also benefited from persistently high demand for grid infrastructure, reflected in particular by a strong increase in orders. In contrast, revenue performance in both areas fell short of expectations in some cases, which is primarily attributed to project-related delays. Margins remained solid overall, even though there were slight declines in some areas. In the Transformation of Industry segment, business remained stable, though order intake declined noticeably. Here, more subdued industrial demand is making itself felt.

Analysts see progress at the wind power subsidiary Siemens Gamesa. Profitability is improving significantly but remains negative. At the same time, order intake is developing more slowly than expected, indicating that demand visibility remains limited.

Despite the improved operational outlook, analysts' assessment remains cautious. While structural growth in the energy sector is viewed as intact, the share price performance of recent months already reflects a large portion of these positive expectations. Against this backdrop, the risk-reward ratio is currently considered less attractive. Analysts also urge caution amid potential cyclical slowdowns in a future market environment.

BYD: Is the Disappointment Over?

Is BYD's stock finally shifting into high gear? Currently, the stock of what is now the world's largest electric vehicle manufacturer is trading at HKD 102. This is only marginally higher than at the start of the year, and the stock had already reached this level in the fall of 2021. A sustained positive price trend looks different. There are good reasons for the weak performance. In China, the home market, there is a fierce price war among electric vehicle manufacturers. At the same time, international expansion is proceeding more slowly than planned.

However, according to Citigroup, shareholders can look forward to significant price gains. Analysts recommend buying the Chinese automaker's stock with a price target of HKD 142. However, the experts were more optimistic in March and had projected a price of HKD 174 for BYD shares.

BYD has passed the low point in its operating performance. Although net profit in the first quarter, at RMB 4.1 billion, fell short of market consensus due to significant currency losses of around RMB 2 billion, analysts assess the business performance as stable. They forecast a significant recovery for the second quarter. If 1.12 million vehicles are sold, adjusted core net profit could reach as much as RMB 11.3 billion.

Bank of America is less optimistic. Analysts at the US bank see the fair value of BYD shares at HKD 119.

With RE Royalties, the dividend level and potential pipeline on the one hand, and the low valuation on the other, do not add up. This makes May 20 all the more exciting, when the management team will hopefully present initial results of the potential restructuring at the IIF. With BYD, the analysts' optimism is hard to fathom. It is not clear why the stock should take off right now, of all times. In contrast, the pessimism of mwb analysts toward Siemens Energy stock is almost laughable. The stock is highly valued, but analysts have been recommending a sell since January 2025. At that time, the stock was trading at around EUR 50.