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Learnings From Daimler's Annual General Meeting

Apr. 06, 2018 5:56 AM ETMercedes-Benz Group AG (MBGAF)10 Comments
Stefan Redlich profile picture
Stefan Redlich


  • Daimler hosted its annual shareholders' meeting today and will pay its 2017 dividend on April 10, 2018.
  • Daimler as a company is terrific but Daimler as an investment has been a loss-making scheme.
  • Various risks ranging from diesel ban to overly Chinese influence and massive future investments keep dragging down the stock price.
  • Daimler itself is posting stellar results and boasts a great dividend.
  • Investors can benefit from the upcoming ex-dividend date by locking in a 5.5% forward yield.

Daimler (OTCPK:DDAIF) held its 2017 annual general meeting today in Berlin, my home city, which is reason for me to reflect on my investment in the company and what it could mean for the future. Daimler's stock has been underperforming the market for quite some time, which has pushed the yield to almost record levels.

Source: daimler.com

A vast cocktail of news is pressuring the stock, ranging from the aftermath of the Dieselgate and the recently allowed ban of old diesel cars to the unprecedented 10% investment from Geely (OTCPK:GELYY) and over to the general challenges the company is facing as it transitions into a new era.

In this article, we will outline some key messages from today's meeting and how dividend investors can benefit from the upcoming ex-dividend date.

What is going on at Daimler?

Daimler's Management Board spent hours during its shareholders' meeting to discuss questions on diesel ban, competitive pressures, antitrust complaints, Daimler's organisational restructuring and future challenges as the company transitions into the era of electric cars. Against the background of such a one-sided discussion you may wonder that Daimler is struggling operationally, but in fact the opposite is the case.

Daimler posted record results for 2017, with group EBIT increasing by 14% to €14.7 billion and revenue rising by 7% to €164.3 billion. Net profit surged even more with a gain of 24% and easily topped the €10 billion barrier, coming in at €10.9 billion.

Investors are very afraid of potential litigation penalties connected to Dieselgate and antitrust complaints. Overall, this has resulted in a valuation of around 7 times earnings and a yield above 5%.

My three core learnings from that meeting today are as follows:

  1. Investors are reserved regarding the recently disclosed Geely investment into Daimler. The fear is that with almost 10% of

This article was written by

Stefan Redlich profile picture
I am working as a Business Analyst and Data Engineer in Germany and have started to build up a portfolio focused on Dividend Growth, both on the high and low-end yield spectrum. Primary focus is on Blue Chips with long-reaching dividend track records. I have been investing for 2 years and have been standing on the sidelines for way too long before. I love developing spreadsheets in Google and Excel to analyze financial performance and integrate these two sources with each other!Happy to connect on the various channels!

Analyst’s Disclosure: I am/we are long DDAIF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am not offering financial advice but only my personal opinion. Investors may take further aspects and their own due diligence into consideration before making a decision.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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