RWE

Analysis of RWE share price

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Are you interested in investing in RWE company shares in the energy sector? In this case, we offer you the opportunity through this article entirely dedicated to this company, to read information that will be highly useful to you for the completion of your analyses of this asset. We will provide detailed information on this company’s activities and sources of income, its principal competitors and partners in the market as well as indications related to the fundamental analysis of this company with the factors you should take into consideration.

Elements that can influence the price of this asset:

Analysis N°1

Firstly, it is of course highly recommended that you monitor closely the demand for energy in Germany as well as throughout Europe which will indicate the growth possibilities for this group.

Analysis N°2

We would of course also follow the expansion of this group in emerging countries such as India and therefore its international expansion policy with the implementation of strategic operations in these countries.

Analysis N°3

You should also closely monitor the commodities market, notably the coal and natural gas prices which we know bear a particular influence on the other types of energy on the markets.

Analysis N°4

Still relating to the major points to follow, we recommend you remain up to date with the legal restrictions concerning the use of nuclear energy in Europe and Germany.

Analysis N°5

Finally, it is of course also important that you include a comprehensive study of the competition in this sector in your analysis taking into account details of publications and significant events relating to the major adversaries of RWE.

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General presentation of RWE

We will now take a closer look at the German RWE Group. In fact, to understand its growth capabilities and therefore the possible future of this company it is also necessary to be familiar with the manner in which this company generates its income and therefore in which sectors it is present.

The RWE AG group is a German group specialised in the energy sector. More precisely, this group is currently one of the European leaders in this activity sector.

To better understand the activities of the RWE Group it is possible to divide them into different segments according to the turnover each part generates and how:

  • Firstly, the principal source of revenue for the RWE Group concerns the trade and distribution of electricity and natural gas which generates 72.5% of this group’s turnover. According to the latest figures, RWE distributed 192,000 Gwh of electricity and 56,600 Gwh of gas in 2019.
  • The energy production activities alone represent 15.7% of this company’s turnover with the production of 153,000 Gwh of electricity in 2019 as well as the production of lignite, coal and heat.
  • The remaining 11.8% of this group’s turnover is generated from related activities including the provision of services.

It is also important to understand the geographical distribution of the RWE Group’s turnover. This company generates 36.9% of its turnover in Germany, 38.4% in the United Kingdom, 21.7% from the rest of Europe and 3% from other countries around the world.

Analysis of RWE share price
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The major competitors of RWE

Now that you are familiar with the activities of the RWE Group we offer you the opportunity to learn about this company’s major competitors on the European market:

E.ON

Firstly on the German market we of course find the European energy giant E.ON which is specialised in the energy sector and which was previously a company incorporated under German law resulting from the merger of two German companies, Veba and Viag in the year 2000. The registered office of the company is in Essen and E.On is quoted on the Frankfurt stock market under the symbol EAO. It is also included in the DAX 30 stock market index.

EDF

Another significant competitor of RWE is the French EDF Group which is also specialised in the production and supply of electricity. It is in fact currently the leading producer of electricity in Europe and the second largest producer of electricity worldwide.

Engie

Finally, the third and last major adversary of RWE that we shall examine here is the French industrial group, Engie, which is the third largest company worldwide in the non oil energy sector. This company is the result of a merger between Gaz de France and Suez. The Engie Group currently employs over 158,000 people and its share price is quoted on the financial marketplaces of Brussels, Luxembourg and Paris. It is also included in the stock market indices of the CAC 40, BEL 20 and Euronext 100.


The major partners of RWE

Although RWE has to face some sizeable adversaries in its activity sector, it also regularly implements significant strategic partnerships with other companies and here as follows are two particular examples of this type of alliance:

Renault

Firstly, in 2009, the group formed an alliance with Renault for a cooperative agreement aimed at developing together a rechargeable system for electric vehicles in Germany. This infrastructure, created by both companies, became operational in 2011. RWE invested more than 100 million Euros in the charging stations and supplied electricity to these stations from renewable sources.

Deutsche Telekom 

Earlier, in 2007, the group also formed an alliance with Deutsche Telekom as a service provider for smart counters for the installation of 15,000 digital counters in Mulheim. The counters installed by Deutsche Telekom in fact collected data from the counters which was transferred to RWE after encoding in a secure manner.

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The factors in favour of a rise in the RWE share price:

Another reliable way to learn the value of a company on the stock market is by comparing its advantages and disadvantages. We therefore offer you the opportunity now to learn about the major weak and strong points of this asset and the issuing company.

Concerning the advantages enjoyed by the RWE Group we particularly note the following points:

  • Firstly, the number of clients that RWE has is clearly one of this company’s major advantages as this company alone supplies over 45 million households just in Germany. In fact the group has over 15,000 employees.
  • We can also underline as an advantage the fact that the RWE Group has implemented a comprehensive diversification strategy in its activities. The portfolio of this group includes different types of energy including oil, natural gas, nuclear energy, and lignite, which enables it to generate a total of 30 GW and also reduces its exposure to one single segment.
  • From the point of view of investors and shareholders we also appreciate the fact that the RWE Company displays excellent financial health with highly positive results over the years which is a positive sign of stability and its ability to face difficult times.
  • Finally, we also note the major investments in research and development made by this company which has enabled it to improve its operational efficacy in a continuous manner.


 

The factors in favour of a drop in the RWE share price:

We shall now pass on to a review of the principal weak points of the RWE Company and therefore its major disadvantages:

  • Firstly, we are of course disappointed that the activities of RWE are mainly concentrated in the European market whereas some of its competitors are already well implanted on an international level.
  • Also, another weak point of this group relates this time to the fact that this company was implicated in various judicial problems, notably related to the elimination of nuclear waste. This of course generated financial problems for the company as well as significantly damaging the reputation and standing of its brand image with the general public, despite the efforts made following these accusations.

A comprehensive understanding is necessary of the strong and weak points of the RWE Company with a comparison that will enable you to better understand the appeal of this company for investors, as well as the ability of this company to grow in coming years according to the opportunities and threats it may face.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

What were the last financial results for the RWE Group?

The latest financial results published up to now for the RWE Group, those for the 2019 financial year, indicate that this German group achieved a turnover of 13.1 billion Euros with a net result of -0.5 billion Euros. This group has a debt of 31.9 billion Euros with funds of 5.7 billion Euros. The share capital of the RWE Group at the beginning of 2020 was 22.3 billion Euros.

Who are the principal private shareholders of RWE shares?

The capital of the RWE Group is divided among different types of shareholders including private shareholders such as the town of Dortmund that holds a 4.79% shareholding, the town of Essen that owns 3.05%, Norges Bank Investment Management with 2.92%, BlackRock Investment Management with 2.81%, The Vanguard Group that holds 2.71%, Henderson Global Investors owns 2.50%, DWS Investments with 2.38%, Commerzbank Investment Management owns 2.37%, Lyxor International Asset Management with 2.10% and DWS Investment holds 2.06%.

Where to find reliable information on RWE?

If you are seeking information and reliable useful and pertinent data regarding the RWE Group and its share price this can be obtained from various sources such as the company’s official website in the section reserved for investors. You can also find certain data regarding this asset on the platforms of reputable online brokers.

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