Portfolio Booster Wanted? Deutz, TKMS and DRC Gold – Three Stocks With Potential

Deutz: The Cologne-Based Engine Manufacturer Reinvents Itself

For a long time, the only thing you could smell at the Cologne-based engine manufacturer was diesel. But that smell and the dust of the old days have long since been blown away. Deutz has flipped the switch and is now focusing on alternative powertrains. Hydrogen engines and electrification are now capturing investors' imaginations. Meanwhile, the traditional business reliably generates the "necessary cash flow" for this costly transformation, and right now, it is a compelling mix of old-economy strength and green visions for the future. The Cologne-based company is proving that even as an industry veteran, it is still trying to keep up with the times and set the pace and direction for the future.

Operationally, it is running surprisingly smoothly. The order books are well-filled, and management has costs firmly under control. As a result, the company boasts a robust EBIT margin that brings tears to the eyes of many competitors. Revenue remains stable in the billions. The service business is growing rapidly and provides reliable income. It is precisely this stability that investors love in these increasingly uncertain times.

In terms of valuation, the stock is not particularly expensive yet. The price-to-earnings (P/E) ratio remains attractive at around 16 for 2026 and is expected to drop toward 10 by 2027. On top of that, the dividend yield is around 1.7%, which makes the wait for higher prices more palatable. Investors buying here are essentially buying a solid industrial stock with a green turbo boost. The investment thesis is clear: once the breakthrough in hydrogen propulsion happens, the market is likely to re-evaluate this stock significantly. From a technical analysis perspective, the stock would need to break through the EUR 13 mark to continue trending toward EUR 18–19.

From Cologne, we head to the coast. Here, TKMS is working to ensure maritime safety.

TKMS: Full Steam Ahead into the Defence Boom

As mentioned at the outset, the world—and the markets—have become more turbulent. This uncertainty is then reflected, directly or indirectly, in the defence industry's order books. At thyssenkrupp Marine Systems (TKMS), the cash is rolling in. A potential "major submarine contract" from Canada, for which TKMS is the preferred bidder, catapulted the share price to an all-time high of a staggering EUR 108.80 over the summer.

Since then, however, profit-taking has set in, pushing the stock back significantly—not only below the EUR 100 mark but even well below the EUR 90 mark. The stock has recently settled at around EUR 82. Despite this setback, or perhaps precisely because of it, the stock remains a highly exciting bet on ongoing military buildup. The current dispute over the F126 frigate project does not directly affect TKMS from a legal standpoint. The Damen shipyard is demanding a whopping EUR 2.3 billion from the federal government. This once again shows how much money can and will flow into this sector.

The operational pipeline is literally bursting at the seams. The Wismar City Council has just given the green light for the shipyard's renovation. There, approximately EUR 200 million is being invested in new production halls for submarine construction. At the same time, TKMS is expanding its reach internationally. In Brazil, a new service unit has launched in Itajai. It has already secured a maintenance contract for the tugboat "Antares." Through its British subsidiary, the company also secured a major contract for torpedo defence systems for the Royal Navy. But the real bombshell may still be to come. Government decisions from India are expected by the end of October. At stake are a whopping six submarines and a contract value of around EUR 8 billion.

These figures are encouraging. They show the potential lying dormant in the stock. Analysts see price targets well above EUR 130, heading toward EUR 140. The service business is increasingly providing steady revenue outside of major contracts. Following the recent price decline, the valuation has become significantly more attractive again. If the India deal goes through, the current consolidation could quickly be forgotten. A cooperation framework with the Italian company Fincantieri is also expected by the end of the year. TKMS is, and remains, a maritime heavyweight with strong opportunities. From a technical analysis perspective, the stock would need to rise above the EUR 91 mark to regain the upper hand. On the downside, the EUR 70 level has always served as a "support" so far. Bold investors are buying in stages during pullbacks.

From the maritime defence sector, we now set off on a journey to Africa, where an opportunity in the gold sector lies in wait.

DRC Gold: The Hidden Gem Before the Big Breakout?

Gold is usually in high demand during uncertain times and serves as the ultimate safe haven. Investors looking to protect their portfolio against crises cannot ignore this yellow precious metal. In this context, DRC Gold is coming into focus.

The company announced a major milestone on September 1. It secured an option agreement to acquire a 55% stake in the project company Giro Goldfields from Amani Consulting. These properties in the world-famous Kilo-Moto Greenstone Belt are a geologist's dream. The proximity to the Kibali mine is also noteworthy; it produces over 600,000 ounces of gold annually.

The facts from DRC's presentation look promising. The Giro project boasts a historical resource of 4.1 million ounces of gold at the Kebigada deposit. But that is not all. DRC Gold has secured an option on the Nizi gold project, where the historic King Leopold Mine awaits a new lease on life.

At the helm of this venture and of DRC Gold is CEO Klaus Eckhof. An industry legend, Eckhof has already led several projects to success. His passion, experience, and extensive network in Africa could prove invaluable. To finance the transaction, shares are being issued. Most recently, 25 million shares were issued, with a further 325 million subject to shareholder approval. The partners are investing through shares, and the projects are being financed. The setup could hardly be more compelling.

Things are getting exciting on the chart. The stock is currently trading around CAD 0.23. This puts it in the upper range of an upward-sloping trend channel. A true breakout would occur if the stock closes above the upper boundary at CAD 0.27. From there, it would be just a stone's throw toward CAD 0.30 and then on toward CAD 0.375. That would mark a new all-time high. Strong gold prices and the latest news offer exactly what the stock needs right now to take off and build further upward momentum.

Deutz demonstrates how a classic industrial conglomerate is mastering the leap into the future. Solid margins and a reliable dividend are on the horizon here. TKMS remains a defence heavyweight. Following a healthy price correction and with major order opportunities on the horizon, the company now looks attractive again. DRC Gold is an exciting precious-metals play with top-tier management. The scale of the historical resources leaves plenty to be excited about. The stock could have significant potential!