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December 27th, 2021 | 07:53 CET

RWE, Memiontec, E.ON: You know what you've got here

  • Utilities
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Utilities have long been considered boring. Then they were unpopular for a long time because of their involvement in nuclear power. That has left its mark. Utilities are still out of favor with many investors. But share price developments have long since spoken a different language. Some utilities are even benefiting from the hype surrounding renewable energy. We present three solid shares that are anything but boring.

time to read: 2 minutes | Author: Nico Popp
ISIN: RWE AG INH O.N. | DE0007037129 , Memiontec Holdings Limited | SGXE56008290 , E.ON SE NA O.N. | DE000ENAG999

Table of contents:

    RWE: Steps in the right direction

    Between 2015 and 2021, RWE's share price more than tripled. In the meantime, a bit of calm has returned to RWE. The Company now earns around 83% from energy trading. The classic fields of activity, lignite and nuclear power, contribute little to the business. RWE is thus well positioned. The disadvantage of the energy trading business is its high volatility: sometimes RWE does well, sometimes less so. The Company wants to expand its share of renewable energy sources further and has announced some initial steps in this direction in recent months.

    However, due to the growing regulatory pressure surrounding alternative energy sources and climate neutrality, RWE will have to stretch itself in the coming months and years. The dividend is a positive factor for investors - the utility pays out 2.8%. It may be negligible for growth-oriented investors, but the dividend remains one of the few arguments favoring the share for all long-term share savers. RWE is solid but not a high flyer. Only a big deal around new energy sources could boost the stock. The recent investment in EnergyTech envelio was a step in the right direction.

    Memiontec: This utility is a quintuple

    Asian water utility Memiontec Holdings has taken several steps in the right direction this year. The value jumped from 12 to around 60 cents between July and October. Currently, the stock is trading stably between 40 and 50 cents, suggesting great relative strength. Memiontec offers complete solutions for water purification in Indonesia, Singapore and China. Especially in Indonesia, the Company has longstanding business relationships. Supply contracts often have terms of 25 years.

    The Company is benefiting from the growing importance of water treatment. Even though this is nothing new for us in Germany, water purification is considered a growth market in Asia. A lot of wastewater still flows into the rivers there. However, the growing danger of epidemics and the increasingly crowded living conditions in the course of urbanization make urgent action necessary. Even though Memiontec's share price has already risen sharply, the Company is not an inflated stock. The Company pays a dividend and intends to stick to this strategy. With a market capitalization just into the three-digit range, Memiontec cannot be compared with RWE, but it also offers a solid core business. Those who do not shy away from investments in Asia should take a closer look at this share.

    E.ON: This signal could be worth its weight in gold!

    In contrast, E.ON's share price has been relatively sluggish - and has been for years. Today, E.ON is, first and foremost, a network operator. It has always been known that energy networks are important. With the growing importance of renewable energy sources, such as offshore wind farms, gigantic power lines are becoming even more important. The political environment, therefore, appears positive for a company like E.ON. Although the stock did not move for a long time, it still offers more than a 4% dividend yield. Most recently, it also managed to break out above a longstanding resistance area at EUR 11.30. E.ON could pick up speed. This stock is also suitable for the watch list.

    Whether a German utility with a dividend guarantee or an Asian growth company with years of experience and long-term business relationships: Utilities do not have to be boring. While stocks such as RWE are rightly falling out of favor with investors, newcomers like Memiontec show that rich returns are also possible with utilities.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

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    Der Autor

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author

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