Opinions
Paul Harris, CFA
Bayerische Motoren Werke AG
BMW-GR
TOP PICK
Mar 08, 2017
Stock price when the opinion was issued
You might be interested:
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)
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)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.
About 40% of the company is owned by the Quandt family, so you have a very stable shareholder. Also, the company has been very good at introducing people to products, like their cars, which is very good from a marketing perspective. The company will give up margin in the short term for longer-term gains. They will spend more on R&D and more on CapX. Car sales in Europe have not been strong compared to Canada and the US, and he sees that as an opportunity. Dividend yield of 3.71%. (Analysts’ price target is euro 88.)