NBG Investment Analysis Report & Stock Research, National Bank of Greece S.A. ADS

NBG Revenue

Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, NBG the high and low end of the Price to Sales per share ratios are 3.02x and 1.44x respectively.

Notice that NBG's current Price to Sales per share ratio is 1.24x, which is significantly below its average levels historically. In fact, with a current price of $4.39, NBG is a full 45% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for NBG.

NBG Cash Earnings

As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of NBG, Ockham views their current Cash Earnings as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for NBG, the current level of Cash Earnings compared to its historical levels helps identify where NBG is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 31.65 and a historical low Cash Earnings per share ratio of 13.52, an investor can relate where value becomes optimal.

Now that NBG’s current price is $4.39 and its Price to Cash Earnings ratio is 16.26, we are very positive on its outlook from the cash earnings perspective. In fact, NBG is now trading a full 29% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why NBG has great long term potential, the Cash Earnings levels to current stock is one of our primary reasons. But naturally, now we need for the overall market to recognize this disparity.

NBG Dividends

While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company.