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How to buy ThyssenKrupp stocks in 2022

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Author: Tony Loton Updated: July 4, 2022

ThyssenKrupp AG is a multinational conglomerate headquartered in Germany that focuses on the manufacturing and production of steel. The company is one of the largest steel producers in the world, with 670 subsidiaries. In addition to steel production, ThyssenKrupp offers a range of products from machines and industrial services to high-speed trains, elevators, and shipbuilding. The company belongs to the materials industry, with its primary operations in the steel sector. This is a guide on how you can buy ThyssenKrupp stock with conviction and why it is a good investment taking into account the fundamental and technical analysis of the company.

How to Buy TYEKF Stocks in 5 Easy Steps

  1. 1
    Visit eToro through the link below and sign up by entering your details in the required fields.
  2. 2
    Provide all your personal data and fill out a basic questionnaire for informational purposes.
  3. 3
    Click 'Deposit', choose your favourite payment method and follow the instructions to fund your account.
  4. 4
    Search for your favourite stock and see the main stats. Once you're ready to invest, click on 'Trade'.
  5. 5
    Enter the amount you want to invest and configure your trade to buy the stock.

Everything You Need To Know About ThyssenKrupp

When investing in a company, it is vital to understand the business model. Knowing how the company makes money, its strategies, and what management plans to do to continue growing the business are all critical factors that determine the company's intrinsic value. Below is a deep dive into the mechanics of ThyssenKrupp AG company.

ThyssenKrupp History

ThyssenKrupp was born from the merger of two German steel companies: Thyssen AG, founded in 1891, and Krupp, founded in 1811. In the 1980s, the two businesses began negotiating the merger and started closely aligning their business segments. Finally, in 1997, the merger began and was completed in March 1999.

Shortly after completing the merger in 1999, the newly formed ThyssenKrupp AG was officially registered on the Frankfurt Stock Exchange under the ticker TKA. The company has since acquired billions of euros in assets and divested other subsidiaries.

What Is ThyssenKrupp's Strategy?

ThyssenKrupp's strategy to grow its revenue is at its core to transform the group of companies into a high-performance multinational conglomerate with a lean management model and a structured portfolio of companies. The company plans to make this transformation with three key themes: Performance, Portfolio, and People. Management plans to continuously improve the performance and competitiveness of the company by adopting cutting-edge technology and making its operations more environmentally sustainable. The management also plans to realign its subsidiaries to divest companies that are no longer valuable or show little growth potential. Finally, the company plans to invest in its human capital.

How Does ThyssenKrupp Make Money?

ThyssenKrupp generates revenue from seven primary arms of operation. The operating segments of the company are as follows:

  • The Automotive Technology segment is responsible for developing and manufacturing high-tech components and systems for the auto industry. In addition, this segment also conducts system engineering for the auto industry, including the development of automated production systems.
  • The Industrial Components segment manufactures slewing rings, rolling bearings, and seamless rolled rings for the wind energy and construction machinery sectors. This operating segment is also responsible for manufacturing forged components and system solutions for the resource, construction, and mobility sectors.
  • Plant Technology is another segment that does the construction of chemical, cement, and mining industries.
  • The Elevator Technology segment is tasked with developing, installing, servicing, and modernizing passenger and freight elevators, escalators, moving walkways, passenger boarding bridges, stairs, and platform lifts. This segment was discontinued in 2020 after the completion of the acquisition of the segment by Advent International.
  • Marine systems supply the systems for submarines and surface vessels, maritime electronics, and security systems. This segment contributes the smallest amount to the group's overall revenue but is one of three segments that report a profit.
  • The Materials Services segment is the global materials distributor for the group. The segment is responsible for the production of stainless steel. The segment also focuses on customer-specific services such as processing, warehousing, logistics, and supply chain solutions. This segment contributes the most significant portion of the revenue generated, amounting to 30% of revenue over the past five years.
  • Steel Europe is the segment responsible for producing carbon flat steel for the auto industry and other sectors. This segment is the second-largest contributor to revenue generated, averaging 20% over the past five years.

How Has ThyssenKrupp Performed in Recent Years?

ThyssenKrupp's stock performance was on an upward trend until 2017 when the stock price took a turn for the worse. Over the past five years to 2021, ThyssenKrupp stock produced a total return of -57%. ThyssenKrupp's revenue has decreased 15%, with an average revenue decrease of 3% per year. The stock's last dividend payout was in 2019 after deciding in 2020 to suspend their dividend payout due to the global economic climate at the time.

ThyssenKrupp Fundamental Analysis

Fundamental analysis is a method used to evaluate the intrinsic value of a security. It involves analyzing various microeconomic and macroeconomic factors. The intrinsic price can then be compared to the current share price to determine whether the asset is overvalued or undervalued. We will examine fundamental factors in this guide: revenue, P/E, earnings per share, dividend yield, and cash flow.

ThyssenKrupp’s Revenue

A company's revenue refers to the total amount of income produced from the sale of goods or services directly to the company's primary operations. In the case of ThyssenKrupp, the company generates revenue from the sale of steel and machinery. Revenue is usually found in the profit and loss statement and is the first line item. The term revenue growth refers to the rate of increase in revenue from year to year. A company with high revenue growth is called a growth stock. More mature companies like ThyssenKrupp tend to have lower revenue growth but higher profit margins from economies of scale. 

ThyssenKrupp’s Earnings-per-Share

Earnings-per-share, also called EPS, is a financial ratio that divides the earnings available to common shareholders by the weighted average shares outstanding over a certain period. The ratio indicates a company's ability to produce net profits, which is the residual money available to a company after paying the expenses incurred during that period. This ratio can be used to compare companies. For example, between two companies with the same number of outstanding shares, regardless of industry, the company with higher EPS indicates better profitability, and investors can expect this stock to perform better.

ThyssenKrupp’s P/E Ratio

The P/E ratio is the price-to-earnings ratio, and it shows the relationship between the stock price of a company and the earnings-per-share. This ratio is popular amongst investors as it better indicates the stock's intrinsic value than the EPS ratio. P/E ratios can be calculated using the company's earnings over the past twelve months. This is called a trailing P/E ratio, or it can be calculated using the forecasted earnings per share, which is called a forward P/E ratio. The trailing P/E ratio tells the investors whether the stock has been undervalued or overvalued in recent months. In contrast, the forward P/E ratio indicates how profitable the company may be in the future. The P/E ratio is also known as a valuation multiple and is usually reported as a multiple. For example, ThyssenKrupp's average P/E ratio over the past five years is 19x.

ThyssenKrupp’s Dividend Yield

Dividends are a percentage of profits that a company pays to its shareholders and are usually reported per share. For example, in 2019, ThyssenKrupp stock declared a dividend of 0.15 euros per share. The dividend yield ratio is another financial ratio that indicates the annual value of dividends received by a shareholder relative to the market value per share of the paying stock. The ratio is usually reported as a percentage and is calculated by dividing the dividend received per share by the share's current price. For example, if a company pays $0.50 in dividends and the current stock price is $10.00, then the dividend yield on the stock is 5%.  

ThyssenKrupp’s Cash Flow

A company's cash flow refers to the net balance of cash moving into and out of a business during a defined period. Cash flows can be positive or negative for different companies or the same company at different quarters in a given year. A sustainable and constant positive cash flow indicates that the company can meet its short-term obligations. On the other hand, a fluctuating cash flow or consistent negative cash flow indicates that the company is not generating enough cash from operations, therefore the company may eventually run out of cash. Investors must be wary of companies with unhealthy cash flows as these companies tend to have a declining stock price.

Why Buy ThyssenKrupp Stocks?

ThyssenKrupp is a defensive stock which means that when there is a lot of market volatility, ThyssenKrupp stock tends to remain stable at its intrinsic value. In other words, it has a low correlation to the market. The company pays a dividend and recently saw a price drop, making the stock a good buy. Here are some reasons you might want to buy ThyssenKrupp stock:

  • You gain exposure to a diverse set of sectors like metals, materials, construction, and engineering.
  • You are investing in a company that has been in operation for 22 years with more than 100,000 employees.
  • Over the past five years to 2021, the company has used its cash to service and reduce its debt. This is a good sign, as a company with too much debt could lead to bankruptcy.

Expert Tip on Buying ThyssenKrupp Stock

When trading ThyssenKrupp stock, always remember that the market is right even when it looks wrong. As a retail investor, you may have an investment account with a couple of thousand dollars, maybe millions. However, financial markets transact billions of dollars every second. Very few investors can withstand going against the market even if you believe your investment thesis is correct. For example, if the market believes that the intrinsic value of a security is $100, assuming that the market is efficient, the security will trade as close to or at $100. As such, use your risk management tools to reduce any losses for the times your trade doesn't go the direction you forecasted.
- Tony Loton
Buy ThyssenKrupp Stocks Today!

5 Things to Consider Before You Buy ThyssenKrupp Stock

To be a profitable trader, you should consider the following five things when trading:

1. Understand the Company

It is never a good idea to invest in a company that you do not understand. This is called herd investing, and it can be costly when you blindly follow other traders. Some companies are famous for the products they sell, but most of the revenue they generate and the profits they earn may come from a different business segment. For example, most customers might know Amazon for its online presence, but a large percentage of its profits come from its cloud services. Amazon is the largest cloud service provider. Understanding the mechanisms by which a company makes money is the first indicator of the company's worth.

2. Understand the Basics of Investing

The best way to start investing is to start investing. This may seem obvious and straightforward, but placing that buy order or sell order isn't as simple as it sounds. It is essential to understand how to trade and how your platform works before beginning your trading journey. Doing this can save you quite a bit of money. You should understand the trading terms like stop-loss, bid/ask spread, and bear and bull markets. Trading is fascinating when you understand how the market works. Reading this guide is a great way to understand the basics of trading but reading more and doing your research is never a bad idea.

3. Carefully Choose Your Broker

Choosing the right broker can be the difference between making a profit or a loss in your trading journey. First, you must determine the best broker for your trading style. You may need a broker with high execution speeds and low trade fees if you plan to day trade. If you plan to swing trade or buy and hold, you might prefer a broker that charges low fees on overnight positions. As a beginner, you would want a broker with good customer service to help you navigate the platform, and you will need a demo account to practice your trading. Some traders who do not have access to major global currencies might need a broker that allows funding with credit cards rather than wire transfers. There are thousands of brokers, both on-shore and off-shore. It is up to the trader to do their due diligence when selecting the best broker for their trading style.

4. Decide How Much You Want to Invest

Before you begin your trading journey, you must first figure out how much you can afford and how much you are willing to invest. Unfortunately, not all of us can inherit millions and decide to invest it all. Most people become discouraged at this stage because they see other traders' accounts with large trading balances. However, saving and investing as little as $500 per month increases over a few years, especially when making sound investment decisions.

5. Decide On a Goal for Your Investment

Begin with the end in mind. This step is critical as it determines how much you should be saving each month and how you should be trading. If you have a short investment horizon and need a lump sum of cash, maybe as a down payment on a house, you will need to take on more risk than someone investing for retirement. Having a goal also influences your choice in brokers and what stocks you buy. For example, if you would like your trading account as another source of income, you may need to invest in high dividend stocks with a broker that charges withdrawal fees. Only you can determine your goal, and it is also acceptable to have more than one goal while trading.

The Bottom Line on ThyssenKrupp Stock

In this guide, we took a deep dive into the ThyssenKrupp AG company. We went into the company's history and discussed how the company makes money; we examined the company's strategy for growth and discussed where the stock is traded. We then talked about the fundamental factors that contribute to the stock's intrinsic value, like P/E ratio, EPS, and dividend yield. We also offered some trading tips and a list of five things to consider when trading ThyssenKrupp stock.

All that is left for you to do is decide your investment goal and start trading. It is easy to overthink your trades or forget the basics, but applying the tools you learned, like your fundamental analysis and risk management, can save you from incurring losses.

For some, the idea of hitting buy or sell might be overwhelming. That's understandable; trading can be intimidating at times. When you feel this way, read some more and practice trading in your demo account some more. Remember, your trading journey begins long before you make your first investment.

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Frequently Asked Questions

  1. ThyssenKrupp shares are traded on the Frankfurt Stock Exchange. For traders outside of the Eurozone, you would need to check with your broker to ensure it allows access to this stock exchange. In addition, there may be an additional monthly fee for the data feed on your platform.

  2. The MDAX is an index of stocks that trade on the Frankfurt Stock Exchange. The index includes the 60 Prime Standard shares of companies that comply with higher transparency standards than the average stock on the exchange. Since ThyssenKrupp stock is part of the index, the company complies with a higher regulatory standard than most of the stocks on the exchange.

  3. ThyssenKrupp AG has good financials and a solid balance sheet. The company has a healthy cash flow and controls quite a few subsidiaries that the company can sell if the need arises. Investing in ThyssenKrupp shares offers a cheap way to diversify your portfolio as the company is a conglomerate that operates in many sectors.

  4. ThyssenKrupp's financial statements are in the investor relations section of the company website. The financial statements are published on a quarterly and annual basis. You can also access an abbreviated version of the company's financials on websites like Yahoo Finance.

  5. Fundamental analysis is used to determine the intrinsic value by examining the company's financial statements and using ratios like P/E, EPS, cash flow, and dividend yield. Technical analysis uses statistical tools to predict the stock price movement regardless of the company's financials.

  6. Risk management tools are a built-in feature of a trading platform that helps traders reduce the risk of losing capital. Tools like stop losses and limit orders are automatic triggers traders use to open or close a trade when the stock reaches the desired price.