25. May 2021 | 08:16 CET
Deutsche Bank, Mineworx Technologies, Deutsche Telekom - ESG stocks have enormous potential
ESG stands for Environmental, Social and Governance. The Environmental area covers environmental pollution or hazards, such as CO2 emissions and energy efficiency issues. In the Social space, health care, occupational safety and social commitment are assessed. Under leadership, one looks at sustainability, corporate values and their control processes. The trend towards ESG shares has increased significantly in recent years. Especially for the younger generation, sustainability is fundamental. We take a look at three companies that are addressing sustainability.
time to read: 3 minutes by Armin Schulz
"[...] In 2020, the die is finally cast in the automotive industry towards electromobility. [...]" Dirk Harbecke, Executive Chairman, RockTech Lithium Inc.
Deutsche Bank - Positive business trend continues
Sustainability at banks does not just start with investments offered but also with lending. Deutsche Bank aims to have EUR 200 billion in sustainable investments and financing on its balance sheet by 2023 rather than 2025. The bank also wants to achieve at least a 35% quota of women at the management level by 2025 and company cars are to emit no CO2 by 2030.
In the speech at the Annual General Meeting on May 27, which was published in advance, CEO Sewing spoke of a "continued good business performance in the second quarter." The speech by the head of the Supervisory Board was also released in advance. It reiterates that Deutsche Bank's stability no longer needs to be questioned. There are still areas of improvement, but overall the Company is on a good path.
The share continues to be on the upswing following the statements made. Last Friday, the EUR 12 mark was broken. The coming economic upswing after the pandemic, rising interest rates on the bond market, and the prospect of a dividend in the coming years make Deutsche Bank attractive for investors again.
Mineworx Technologies - From explorer to sustainability company
Mineworx Technologies has an interesting history. The Company started as a junior explorer and owns two interesting areas in Spain. One is a wollastonite mine, the other an iron ore mine near Cehegin. There, a 21-hole drilling program is currently underway to confirm historical results in the area. It is assumed that there are 60-100 million tons of iron ore. If this is confirmed, this asset alone would be reason enough for a revaluation of the Company.
However, in the meantime, the focus of the business is on sustainability by recycling precious metals from diesel catalytic converters. Platinum and palladium can be recovered from these. If the electrification of commercial vehicles continues, there will soon be plenty of decommissioned diesel vehicles and diesel catalytic converters. Recycling currently takes place via melting, which poses risks such as explosions due to trapped carbon.
Mineworx takes a different approach and recovers platinum and palladium from the ground core materials of the catalysts through a chemical process. The resulting concentrate can then be sold to a refinery. The method significantly reduces emissions from the smelters that would otherwise be used.
Planning for the pilot plant has been completed and fully financed. Commercialization is to be launched in the US and a letter of intent has already been signed with Davis Recycling, a leading catalyst recycler on the East Coast of the US, to supply the necessary core materials. Mineworx expects sales of USD 100 million at full-scale production and a gross margin of about 20%. If all goes as desired, plants are planned throughout North America.
Currently, there are approximately 342 million shares outstanding. The share price is CAD 0.07. Thus, the market capitalization is CAD 23 million. Considering that the iron ore reserves in Cehegin alone, at an assumed 60 million tons, have a value of over EUR 10 billion, the opportunities are enormous. In addition, the Company is operating in a green niche, which has a lot of growth potential in the coming years. The Company, therefore, has two irons in the fire.
Deutsche Telekom - Profits should bubble up
Deutsche Telekom already has a fairly high ESG score but wants to improve further in this area. The top goal is to reduce or stabilize energy consumption and to do so while expanding the communications network. Reducing emissions is the second most important goal. Even managers' bonuses are assessed under sustainability criteria, among other things.
CEO Höttges wants to turn the profit screw more. Accordingly adjusted earnings are to rise to more than EUR 1.75 per share by 2024. A contribution to this is to be made by T-Mobile US, where Telekom intends to increase its stake from 43% to at least 50%. In addition, 5G coverage is to be fully expanded to 97% of Germany by 2024. The Company plans to invest up to EUR 6 billion to expand the infrastructure as a whole.
The share has not only been on an upward trend since this news. It was not until the end of March that the high from 2020 could be lifted upwards. The March high could only be tested in May but not overcome. If this mark is cracked, the high from 2017 at EUR 18.15 awaits. Currently, one should wait for a setback, even if the prospect of rising dividends in the coming years is tempting.