Opinions Paul Harris, CFA
Bayerische Motoren Werke AGBMW.DETOP PICKJun 16, 2016
Paul Harris, CFAStock price when the opinion was issued
As of Aug 29, 2024. Market Open.
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Dividend bounces around, but between 5-9% over last few years. World-class name. Auto industry has been depressed for a decade, but now coming back. Politicians are hammering less on EVs. Elon's burned his bridges with the luxury consumer; Teslas will disappear, and BMW and Mercedes will come back. He sold to buy a bit more NVDA.
Trades at 6x earnings. Even through pandemic, increased production and sales slightly. Upper-end brand name. Consumer's down and so is China, but you'll see activity once that turns. Wealthy in China are still increasing, and that's a big market for them. EV offering is better than TSLA's. Yield is 7.26%.
(Analysts’ price target is $44.70)
Bruce MurrayBruce MurrayBruce Murray
The traditional car makers have finally made moves to catch up to Tesla. In one of the best positions to benefit from cyclical and secular trends. Margins are improving, leading to a higher stock multiple. Yield is 2.30%. (Analysts’ price target is $84.65)
Jamie Murray (A Top Pick Jul 24/18, Down 18%) Auto stocks have remained out of favour longer than he thought, despite this stock having a good dividend. The Chinese market turned down sharply, following comments from President Trump. There is nothing wrong with the company. He expects them to manufacture more e-vehicles than Tesla this year. Yield 5%
Bruce MurrayBruce Murray
A global luxury brand. Selling at 6x earnings. Trump is punishing this company, but BMW will be around long after him. (Analysts' price target: Euros 97.18)
Bruce Murray
You can’t buy this in New York, you have to buy it in Germany. With quantitative easing in Europe, and what happened with quantitative easing in the US is that people frontloaded a lot of purchases. Autos rose up to almost 18 million in North America. Auto purchases are well below 2007 in Europe, so he thinks there is a backlog that will catch up. The stock is not expensive, trading at about 8X earnings. The company has 2 great hybrid electric cars, i3 and i8, but they don’t get the benefit of those. This company will give up margin for long-term growth, which he feels is very important. Dividend yield of 4.68%.