Aperam: Universal Acquisition Will Jump-Start EBITDA Result

2025-03-02 10:40:00 ET

Summary

• Aperam's share price rose nearly 20% year-to-date, but future growth is already priced in. Long-term EBITDA growth expected from 2026 onwards.
• Despite the weak stainless steel market, Aperam maintained a 0.50 EUR quarterly dividend, though free cash flow barely covers it.
• The acquisition of Universal strengthens Aperam's aerospace segment, with expected synergies of 27M EUR by year five.
• Aperam remains attractive with a 6.6-6.7% dividend yield, offering generous compensation while awaiting cyclical market improvements.

Introduction

In a previous article, I argued that I liked to pick up cyclical stocks during a downcycle . This sometimes meant I bought too soon, and I'm still seeing the share price continue to decline. In some cases, the negative impact is mitigated by a generous dividend, and that’s indeed the case with Aperam ( OTC:APEMY ) ( OTCPK:APMSF ), which continued to pay a quarterly dividend of 0.50 EUR per quarter despite the weaker stainless steel market....

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