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April 23rd, 2024 | 07:45 CEST

Attention: DAX dividends! Car stocks pay out: Mercedes-Benz, MS Industrie, VW and BMW

  • Technology
  • hightech
  • Automotive
  • Electromobility
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The DAX 40 index has gone into reverse gear in recent weeks. In addition to the high-tech and artificial intelligence sectors, the multi-month bull market also included defense stocks in the interim phase. There is no real reason to celebrate among automotive stocks, as an expected decline in GDP also means reduced household budgets. This translates to fewer new vehicle sales, with many electric vehicles produced in bulk occupying important showroom space from dealers for months. The pain is increasing, and those looking to sell vehicles find themselves in ruinous discount battles with cheap Chinese imports. However, there appears to be a glimmer of hope on the horizon: interest rate cuts! They are expected in the second half of the year. We analyze the current situation.

time to read: 6 minutes | Author: André Will-Laudien

Table of contents:

    Uwe Ahrens, Director, Altech Advanced Materials AG
    "[...] We know exactly what we are doing and are implementing what we consider to be a proven technology in an industrially applicable and scalable way. [...]" Uwe Ahrens, Director, Altech Advanced Materials AG

    Full interview


    Volkswagen and Porsche - The Group is putting up a good fight

    It was a festive occasion in the autumn of 2022. The VW Group floated 25% of Dr. Ing h.c. F. Porsche AG on the stock exchange and the parent company Porsche SE used the proceeds to secure a majority stake in the "old" Porsche AG. It also remains the majority shareholder in the VW Group's ordinary shares. The state of Lower Saxony and the state holding company of Qatar each benefited by around one billion euros from the income that flowed to Wolfsburg as a result of this restructuring.

    However, the subsequent transformation of the VW Group to e-mobility ultimately cost many billions more. Although the Group has now made progress with its strategy, the Wolfsburg-based company has not yet been able to produce a strong counterpart to the much cheaper models from China and the first mover, Tesla. As a result, analysts expect a sideways trend in sales in the EUR 324 billion range for 2024, with sales not expected to exceed EUR 336 billion until 2025. In the Porsche sports car segment, the Zuffenhausen-based company maintained its deliveries at a stable level in the first three months of the year. A total of 77,640 new vehicles were handed over to loyal customers worldwide, corresponding to a moderate decrease of 4% compared to the previous year.

    "We are getting ready for the future in 2024. With the all-electric Macan, the new Panamera, the Taycan and the new 911, we are updating four out of six model series", says Detlev von Platen, Member of the Executive Board for Sales and Marketing at Porsche AG. In Europe, excluding Germany, Porsche delivered 20,044 vehicles, an increase of 9% compared to the same period last year. In the home market of Germany, the corresponding figure rose by 37%. China brought up the rear with 16,340 vehicles, a fall of 24%, which is attributed to the continuing tense economic situation in the Chinese market. Apart from high dividend yields, there are currently few incentives to buy VW or Porsche. Porsche SE Holding remains analytically favorable.

    MS Industrie - Professional in drive and ultrasonic technology

    From major automotive groups, we now look at a niche player in the field of drive and ultrasonic technology. MS Industrie AG, based in Munich, is the listed parent company of a focused technology group that deals with systems and components for heavy-duty internal combustion engines and new forms of drive technology. In addition, there is the Ultrasonic Technology division, which produces special and series machines as well as ultrasonic systems and components. The Company's key customer industries include the global commercial vehicle and passenger vehicle industries, followed by the packaging machinery industry, medical technology, and other plastics processing sectors, as well as general mechanical and plant engineering.

    The share, known under a different name since 2002, has been listed in the m:access quality segment of the Munich Stock Exchange since June 1, 2023, and will answer questions from the public at the MKK in Munich on April 25, 2024. The outlook for the current year should be interesting, as the Management Board has once again confirmed its last guidance of EUR 250 million based on the preliminary sales figures for the 2023 financial year. The 2023 annual report is due to be finalized in April. If this remains the case, then last year's business development was extremely dynamic, with a 21% increase in sales compared to 2022 and affected both business segments of MS Industrie AG ("MS XTEC" and "MS Ultrasonic") equally.

    "We are pleased that we focused on this innovative ultrasonic welding technology at a very early stage. We develop and produce machines capable of welding recyclable packaging in the food sector in the future. However, our technology has also found its way into the hygiene sector and hospitals," says Armin Distel, CEO of MS Industrie AG. In 2023, the highly innovative MS Ultrasonic division was recognized as a global market leader in this sector by WirtschaftsWoche magazine.

    MS Industrie AG has issued 30 million shares, with a price of EUR 1.72, the market capitalization is only a low EUR 51.6 million compared to sales. If the bond of EUR 20 million is added, the enterprise value is calculated at just under EUR 72 million. Due to the weak expected development in the truck sector in Europe, the analysts at Montega have also slightly lowered their sales and margin estimates for MS Industrie. At the end of March, they published an update with a "Hold" rating and a target price of EUR 2.40, which is still 40% above the current share price. Therefore, the Management Board's comments on the current year should be exciting.

    Mercedes and BMW - What the analysts say

    Returning to the major car manufacturers, investors should focus on the Mercedes-Benz Group and BMW AG. In addition to the lavish dividend payments of 6 to 7% at the beginning of May, there will also be statements on the first quarter of 2024 in the coming days ahead of the Annual General Meeting. This period could have been difficult, as the government canceled the environmental bonus before the turn of the year. The premium manufacturers had promised to accept the subsidy for existing orders for electric vehicles until March 31. Although this may have kept nominal revenues high, margins are likely to have been significantly lower.

    The BMW share price has already risen by almost 20% this year and is recommended as a "Buy" by 8 of the 28 analysts on the Refinitiv Eikon platform. The only crux of the story is the average expected price target of EUR 109.90 over a 12-month horizon. With a current price of EUR 105.70, this is only 4% away. In the run-up to the Q1 figures, the experts at Barclays have left their "Underweight" rating unchanged and expect EUR 95. Bernstein Research argues much more positively. With an "Outperform" vote, the analysts see the good market position of the current model series and room for up to EUR 132 in the share price.

    The Mercedes-Benz Group is also doing well. The share is up 10% in the current year and will offer shareholders a dividend of just under 7% in May. It has been reported that the Group is currently buying back large quantities of its own shares. This is the best dividend policy a company can have for its investors. The experts are in favor of the Stuttgart-based company. A total of 17 "Buy" recommendations can be gleaned from 26 opinions, and the average share price expectation of EUR 84.80 is a good EUR 10 above the current price. Many combustion engine fans are also delighted by the news that corresponding models will be available by 2035. The technological openness from Stuttgart deserves a star for this strategic decision. Of all automotive stocks in Germany, Mercedes-Benz looks the best on the chart. Yesterday, the analyst firm Jeffries confirmed its "Buy" rating with a target price of EUR 100. Both premium manufacturers impress with their strong balance sheets and good market position.

    The shares of Mercedes-Benz, BMW, and Volkswagen are solidly in profit for the year. Tesla is undergoing a correction, while Porsche has already completed this process. MS Industrie AG is moving rather uneventfully but still up 1.3% in 2024. Source: Refinitiv Eikon from 22.04.2024

    The markets are now inclined towards profit-taking, as the high hopes of interest rate cuts have not yet materialized. However, the central banks should be able to bring themselves to make a downward adjustment over the course of the year due to the weakening economy and falling inflation figures. Automotive stocks are very sensitive to the economy and interest rates so that no major upward swings can be expected in the short term. A small consolation is certainly the generous dividends that will be paid out in May.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
    In this respect, there is a concrete conflict of interest in the reporting on the companies.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
    For this reason, there is also a concrete conflict of interest.
    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    André Will-Laudien

    Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.

    About the author

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