Portfolio Manager Gary Anderson of Scout Investments says that Bayer AG’s (FRA:BAYN) return on equity profile looks promising, and he believes the growing worldwide demand for food as well as pharmaceuticals for an aging population will continue to drive Bayer AG.
“[Bayer AG’s] ag chem division will benefit from a growing worldwide demand for food. The emerging markets around the world are moving to a greater demand for a Western diet. The demand for ag chemicals and seeds to provide and augment that diet I think is going to continue to grow,” Anderson said.
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Additionally, Anderson says demand for pharmaceuticals for an aging population will lift Bayer AG going forward, as the company makes blockbuster drugs that deal with aging health issues. He also says Bayer AG has a healthy return on equity profile and is reasonably priced.
“The return on equity profile again is very promising. They were in their lower teens not long ago and are moving into the mid-20s. Their long-term debt to equity has dropped from 70s down to 27, and their p/e ratio of 13.8 and dividend of 2% is I think again a reasonably priced company, and I think the future looks promising for Bayer,” Anderson said.
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