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The European Investment Bank (EIB) has made a significant investment in Valeo (EPA:)’s debut green bond, signaling a shift from loans towards bonds for financing green projects. This strategic move was made on Monday, marking a new direction for EIB’s financing strategy.
This change in approach is part of EIB’s new program and includes bonds from issuers like Engie and Red Electrica. The shift comes at a time when the sales of green bonds have been slowing down, as indicated by Bloomberg league table data.
The EIB’s move also follows the cessation of the European Central Bank’s Asset Purchase Programme. The bank is actively exploring additional opportunities in primary green bond markets involving EU and non-EU corporates, EU public-sector issuers, and EU capital markets.
These steps are in line with EIB’s transformation into the EU climate bank. This transformation aims to support €1 trillion in green investments, reflecting Valeo’s shared interest with EIB and challenging the ‘Greenium’ concept.
The historical relationship between EIB and Valeo played a significant role in this investment. Both entities share a common interest in supporting environmentally friendly projects, which was a key factor in the EIB’s decision to invest in Valeo’s debut green bond.
Valeo, a prominent player in the Automobile Components industry according to InvestingPro Tips, has been showing strong financial performance with high earnings quality and accelerating revenue growth. Its market capitalization stands at 3740M USD, with a P/E ratio of 8.89, as per InvestingPro data. The company’s revenue for LTM2023.Q2 was reported at 23821.48M USD, marking a significant growth of 23.42%.
InvestingPro Tips also highlights that Valeo has maintained its dividend payments for 13 consecutive years, a testament to its strong earnings. This is further supported by a Dividend Yield of 2.07% for Y2023.D282. The company has a history of raising its dividend for 3 consecutive years, indicating a strong financial position and commitment to rewarding its shareholders.
Despite some volatility in stock price movements and a recent dip, analysts predict that Valeo will remain profitable this year, with a Basic EPS (Cont. Ops) for LTM2023.Q2 at 1.79 USD. This, combined with the company’s strong financial metrics and commitment to green projects, paints a promising picture for potential investors.
For more detailed insights and tips, consider exploring the InvestingPro product which includes additional tips. Currently, there are 16 additional tips listed for Valeo on InvestingPro. To learn more, visit InvestingPro.
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