Monday, December 4, 2017

A Quick Analysis of Société Bic

A couple of months back, I was looking through the consumer staples sector and I came across Société Bic that is listed on the Euronext Paris (EPA). For those unaware, EPA is the French stock exchange.

Société Bic is a company that sells stationery, lighters, and razors. I personally have come across the ballpoint pens that the company sells. I don't think I have come across the other two product categories which they carry. What I liked is that the company is not dependent on any one category of product; their revenue sources are quite diversified (see screenshot below) and demand for their products are generally stable.

Fortunately for non-French speaking individuals like me, their investor relations page and other documents are in English.

According to their 2016 annual report, the reported revenue and net income is €2025M and €249M, respectively. Compared to their 2015 financial performance (revenue: 2242; net income: 325), this is a drop of ~10 and ~23 percent, respectively.

Is this concerning? At a superficial level (because I have yet to dig deeper into this company!), it does not appear to be the case. From my screen capture below, revenue and net income seems to hover around the same range.

With the exception of 2015, earnings per share remains within the 5 euros range. Dividend-wise, the company increased the amount of dividends distributed in 2016 even though EPS declined in 2016 (see screenshot below). Correspondingly, the payout ratio increased.

I've taken a quick look at the trend in numbers of shares outstanding for financial years 2014 to 2016. The change is minimal.

I like their balance sheet as the company has no debt.

Cash flow from operations is healthy. Their main business of selling stationery, lighters, and razors generate cash flow for them. After taking into account capital expenditures, the company has shown positive free cash flow over the years.

According to Morningstar's website, the PE trend is starting to become more attractive.

As I am yield-focused, Morningstar shows that Société Bic is currently trading at 3.6% yield. Using my R script (see here), the chart shows that Société Bic could yield up to ~5.75% (based on what happened during the Great Financial Crisis).

Not vested as my inclination towards small positions, coupled with custodian fees, transaction charges, and taxes would put me in the red (even after considering dividends received). -.-"


  1. Hi Unintelligent Nerd,

    Perhaps you are already aware. When buying stocks of French companies, whether it is on the Paris exchange or Hong Kong or U.S or any stock exchange in the world, there is a 0.3% financial transaction tax on companies with market cap of > $1b. I got an unpleasant surprise when buying a French ADR on U.S exchange.

    1. Hi hyom hyom,

      Thanks for the heads-up. All these charges are holding me back from investing. :/