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Max Manturov

Max Manturov

Head of investment research regulated by CySec 08.10.2021

5 euro bonds for a diversified portfolio

Investments in moderately conservative instruments, e.g. bonds, are a good option for diversifying your portfolio. At the same time, an important factor in selecting such an asset class is the ratio of bond yields to the level of risk inherent in the size of the debt burden of the issuing companies. Our analysts have selected 5 corporate bonds issued in EUR by forward-looking companies with leading positions in their industries.

Philip Morris International Inc. (rating A)

ISIN: XS1716245094.
Current price in %: 102,63.
Par value: €1,000.
Coupon rate: 1.87%.
Next call: 06.08.2037.
Yield to call/maturity (Yield to worst): 1.67%.
Type of coupon: fixed.
Maturity date: 06.11.2037.
Debt volume in circulation: 500 million EUR.
Sector: Non-cyclical consumer goods.

Philip Morris International Inc. - is an American tobacco company, one of the world's largest manufacturers of cigarettes, smokeless smoking systems, electronic devices and accessories, as well as other nicotine-containing products. The products are marketed under the Marlboro, Bond Street, Chesterfield, L&M, Lark, Philip Morris and IQOS brands.

Debt burden level:

● Cash and cash equivalents: EUR 5.96 billion;

● Net debt: EUR 25.85 billion;

● Debt to equity ratio:

● Net debt/EBITDA for the last 12 months: 1.79x;

● EBIT coverage/interest over the last 12 months: 16.23x;

● free cash flow (last 12 months): €8.08bn.

Buy Philip Morris bonds >>

Thyssenkrupp AG (BB-)

ISIN: DE000A14J587.
Current price in %: 102,88.
Par value: 1,000 EUR.
Coupon rate: 2.5%.
Next call: -
Yield to call/maturity (Yield to worst): 1.53%.
Coupon type: fixed.
Maturity date: 25.02.2025.
Outstanding volume: EUR 600 million.
Sector: basic materials.

Thyssenkrupp AG is one of Germany's largest technology groups and a leading global producer of steel, industrial machinery and machine tools. The company supplies products and solutions to customers in the automotive, construction, aerospace, mining and a number of other sectors.

Debt burden level:

● Cash and cash equivalents: €11.55 billion;

● Net debt: €6.5 billion;

● debt to equity ratio: 63.91%;

● Net debt/EBITDA for the last 12 months: 0.48x;

● EBIT coverage/interest for the last 12 months: 6.18x;

● free cash flow (last 12 months): -€5.56bn.

Buy Thyssenkrupp AG bonds >>

Airbus SE (BBB+)

ISIN: XS2185868051.
Current price in %: 114,21.
Par value: €1,000.
Coupon rate: 2.38%.
Next call: 09.03.2040.
Yield to call/maturity (Yield to worst): 1.48%.
Type of coupon: fixed.
Maturity date: 09.06.2040.
Outstanding loan amount: EUR 1 billion.
Sector: Industrial.

Airbus SE is one of the world's largest aircraft manufacturers and the leader in the manufacturing of civil aircrafts along with Boeing. Its main areas of focus are commercial jets, civil and military helicopters as well as military aircraft. Airbus is involved in the development of the Ariane 6 launcher. Its first launch is scheduled for early 2022.

Debt burden level:

● Cash and cash equivalents: EUR 14.44 billion;

● Net debt: EUR 21 billion;

● Debt/equity ratio: 325.39%;

● Net debt/EBITDA for the last 12 months: 0.69x;

● EBIT coverage/interest during the last 12 months: 4.06x;

● free cash flow (last 12 months): -€7.18bn.

Buy Airbus SE bonds >>

Vodafone Group Plc (BBB)

ISIN: XS2002019060.
Current price in %: 116,03.
Par value: 1,000 EURO.
Coupon rate: 2.5%.
Next call: -
Yield to call/maturity (Yield to worst): 1.43%.
Type of coupon: fixed.
Maturity date: 24.05.2039.
Outstanding loan amount: EUR 750 million.
Sector: technology

Vodafone Group Plc. is a British telecommunications company, one of the largest mobile operators in the world. It owns and operates networks in 22 countries and is represented by partner companies in another 48 countries. The company's business unit, Vodafone Global Enterprise, serves corporate customers in 150 countries.

Debt burden level:

● Cash and cash equivalents: EUR 5.82 billion;

● Net debt: EUR 67.76 bln;

● debt/equity ratio: 117.2%;

● Net debt/EBITDA for the last 12 months: 2.79x;

● EBIT/interest coverage during the last 12 months: 6.11x;

● free cash flow (last 12 months): EUR 6.72bn.

Buy Vodafone Group bonds >>

Netflix Inc. (BB+)

ISIN: XS2072829794.
Current price in %: 119,46.
Denomination: €1,000.
Coupon rate: 3.63%.
Next call: 15.03.2030.
Yield to call/maturity (Yield to worst): 1.15%.
Type of coupon: fixed.
Maturity date: 15.06.2030.
Outstanding loan amount: EUR 1.1 Billion.
Sector: Technology.

Netflix is a leading streaming service that provides subscription-based access to entertainment content - TV series, documentaries and feature films in various languages. The service is available in 190 countries and has more than 209 million paid subscribers.

Debt burden level:

● Cash and cash equivalents: EUR 6.72 billion;

● Net debt: EUR 13.35 billion;

● Debt/equity ratio: 147.39%;

● Net debt/EBITDA for the last 12 months: 0.46x;

● EBIT/interest coverage for the last 12 months: 7.41x;

● free cash flow (last 12 months): EUR 1.69bn.

Buy Netflix Inc. bonds >>

How Do I Buy Bonds?

If you do not already have an investment account, open it right now - you can do it online in 10 minutes. To do this, all you need to do is fill out a short questionnaire and go through verification.

After opening an account, you can buy bonds in these convenient ways:

1. Via the Freedom24 web-based trading platform. Search for ISIN bonds in the "Web Terminal" section. From the search results, select the company you want. Next, open a securities section in the trading window (on the right), pick the needed amount of bonds, and click the "Place a buy order" button.

2. Via the Freedom24 app for iPhone App and Android. In the "Quotes" window, click the search icon in the upper right corner. In the search window, type the company's ISIN and then choose the needed company from the list of results. Click on it and select the "Order" tab in the opened card. Specify the required number of bonds and click the "Place a buy order" button.     

*Additional information is available upon request. Investment in securities and other financial instruments always involves risks of capital loss. The Client should make himself aware at his own accord, including to familiarize himself with Risk Disclosure Notice. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Commissions, fees or other charges can diminish financial returns. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and do not constitute an investment advice service. The recipient of this report must make their own independent decisions regarding any securities or financial instruments mentioned herein. Information has been obtained from sources believed to be reliable by Freedom Finance Europe Ltd or its affiliates and/or subsidiaries (collectively Freedom Finance). Freedom Finance Europe Ltd. do not warrant its completeness or accuracy except with respect to any disclosures relative to the Freedom Finance Europe Ltd. and/or its affiliates and the analyst’s involvement with the issuer that is the subject of the research. All pricing is indicative as of the close of market for the securities discussed, unless otherwise stated.

  • Sources of information

  • Recommendation evaluation methodology in accordance with Terms and Conditions of Market Research Use
    Freedom Finance analysts perform a three-stage analysis. They select a promising industry based on the latest news, statistics and industry-specific metrics. They assess the supply and demand situation and its future development dynamics. Industry’s investment attractiveness is mostly affected by the forecasted market growth rates; total addressable market, player concentration level and likeliness of a monopoly formation, as well as the level of regulation by various entities or associations.

    The assessment is followed by the comparative analysis based on the selected sample. The sample comprises companies with a market capitalization of over USD 1 billion, but there is space for exceptions (when the suitable level of liquidity for company’s securities is available on the stock exchange). The selected companies (peers) are being compared against each other based on multipliers (EV/S, EV/EBITDA, PE, P/FCF, P/B), revenue growth rates, marginality and profitability (operating income margin, net income margin, ROE, ROA), and business performance.

    Having completed the comparative analysis, the analysts carry out a more in-depth research of the news about the selected company. They review company’s development policy, information about its current and potential mergers and acquisitions (M&A activity), and assess the efficiency of company's inorganic growth and other news about it over the past year. The main objective at this stage is to identify the growth drivers and evaluate their stability, as well as the extent of impact they have on the business.

    Based on all the data collected, the analysts determine the weighted forecasted figures of company’s growth rates and proposed business marginality, which are used to calculate the company’s multiplier-based estimated value. The said value enables setting the stock price target and stock value growth potential.

    The expected timing of the idea implementation is set depending on the current market situation, volatility level and available forecasting horizon for industry and company development. The forecasting period is normally set between 3 and 12 months.