Volkswagen and Porsche - Are they the same investment?

Did you know that Porsche owns a controlling stake in Volkswagen?

I came across the notion a while ago, which made me curious to see whether there may be anything to gain for investing in Porsche as opposed to Volkswagen, or whether actually investing in both is pretty much the same, except that investing through Porsche involves more middle men.
Therefore I finally decided to have a look.

Note, Porsche only offers preferential shares with no voting rights, hence I have focussed on the “equal” in Volkswagen, its preferential shares VOW3. This post only looks at economic rights and does not consider the additional value of voting rights.
None of this is investment advice either :wink: .

Lets start with Volkswagen and see how much its economic rights are worth.

Volkswagen - Source
Number of shares:

  • 206,205,445 Preferential shares
  • 295,089,818 Ordinary shares

Therefore the combined number of “economic” rights is 501,295,263 (501 million), assuming like this post says that they both have the same economic rights.
Assuming the price of the preferential shares for the economic rights only and assuming that all the “economic rights” trade at the VOW3 share price of 157.11 euros (price from the T212 app, the ordinary shares, VOW, have a price of 174.73) the estimated combined price of the economic rights of Volkswagen is:
157.11 euros x 501,295,263 shares = 78.75 Billion euros

Porsche owns 31.3% of the shares and hence economic rights (but actually 53.1% of the voting rights), hence it has a “right” over approximately 78.75B x 0.313 = 24.65 Billion “worth of economic rights” in Volkswagen.

Now lets look at Porsche to see how much you pay for Volkswagen economic rights by buying Porsche preferential shares:

Porsche - Source:
Number of shares:

  • 153,125,000 Ordinary shares
  • 153,125,000 Preferential shares

According to their website all ordinary shares are held by the family, which means that the traded shares are preferential shares.

Following the 2019 Porsche annual report, a preferential share has pretty much the same dividend or economic right of an ordinary one (actually, slightly higher for the preference share):
imagen

Hence for the purpose of calculating the cost of the VW “economic rights” and possible dividends “accessible” through Porsche, the equivalent number of shares would be the preferential shares plus the ordinary shares (which in effect equals 2 times the preferential shares as the number is the same), multiplied by the share price value of 57.60 Euros at close yesterday according to the T212 app:
(153,125,000x2)x57.60 Euros = 17.64 Billion euros

Therefore, considering that Porsche to 24 Billion euros worth of Volkswagen’s economic rights, but trades at an approximate price of 17.64 billion, it seems like owning Porsche shares is “worth more” than owning a Volkswagen preferential share (VOW3).
In addition, Porsche does not only have Volkswagen shares but it also has other investments:

imagen

The only offset to this that I can see would be debt, however Porsche had very low debt, with only 40 million liabilities. See extract of 2019 annual report:
imagen

Feel free to discuss below what your thoughts are on Volkswagen :blue_car: and Porsche :oncoming_automobile: .

Let me now what your thoughts are about this and whether my calculations and reasonings make sense or if something is off/incorrect.
Also, any tips to make it easier to read or follow are appreciated, so that I can improve in subsequent threads :smiley: .

Notes:

  • This is not investment advice, purely anecdotal, for discussion.
  • I prefer to buy shares with voting rights and hence as Porsche does not offer voting rights it may be best to buy ordinary shares of Volkswagen, VOW. However, this case I may decide to split my investment in Volkswagen into some ordinary Volkswagen shares (VOW) and some preferential Porsche shares.
  • Most of the information such as the number of shares and the Porsche annual report refers to the end of 2019, a lot may have changed since then.
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Yeah Porsche SE is the parent of Volkswagen AG.

VW then manage the Skoda, SEAT, VW, Audi, Porsche, Lamborghini, Bentley, Bugatti brands.

Lamborghini control Ducati too.

And when it comes to trucks MAN and Scania are both Traton which is a subsidiary of VW AG.

I only know because I’m a big VW fan having had about five Golfs and a Polo.

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so the auto industry might as well be VWs pet? and by extension, Porsche’s. :thinking: :joy:

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The initial retorical question was just me trying to make it sound a bit more interesting :wink: .

My opening posts tend to be quite long, so I am trying to think of ways of making them more entertaining. Maybe they should just be shorter :thinking:, but I like to include all the information that I think is relevant.

I like volkswagen for a few reasons:

  • They span the whole range, from cheap cars to luxury cars.
  • I think they have potential in the Electric vehicles and they seem to be “in the leading pack” compared to its European and USA competitors. Not commenting on south-east asian cars, maybe Toyota and Hyundai have an edge there.
  • Not too expensive. I seem to remember reading a P/E ratio of 16 somewhere and Yahoo says that it is currently 21.5, however looking at their 2019 results they made 26.60 per share (and 23 in 2018) which assuming a similar result in 2021 sounds like a P/E of around 7 to me.

2019 Income Statement:

Yahoo today:
imagen

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Well it’s one of ten main groups that controls about 95% of the auto industry. :sweat_smile:

So other than Germany and inc BMW, Daimler…

Japan: Toyota / Nissan / Honda

South Korea: Hyundai

US: Ford / GM / FCA

France: Renault / PSA

All those together own about sixy+ brands.

You only have a few standalone like Ferrari, Tesla, McLaren

Basically Toyota / VW / Ford dominates the world.

@EquityInvestor how do feel about Ford atm?

Ran crazy high last couple weeks. Must be going back to 9.

Over bought on the weekly

Could have gone short… Half dollar spread :grimacing:

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I don’t really follow Ford. I always thought that it was very reliant on the USA market, but having a quick look it seems like its “only” around 30% of worldwide sales. Also, I don’t recall them being any significant electrical vehicles.

I mainly follow Renault and Volkswagen.

I guess you expect it to move down to the moving average?

I don’t either well not really. I got a free share the other day of F and it took me 10 seconds to sell it.

They are lots in the pipeline but won’t see anything significant for another few years.

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