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Porsche: A Great Buy-And-Hold Stock

Anna Sokolidou profile picture
Anna Sokolidou


  • I am bullish on Porsche thanks to its long history and exposure to Volkswagen.
  • The company has a great product portfolio and enjoys strong financial fundamentals.
  • There is no divorce between ownership and control.

As we all know, Porsche (OTCPK:POAHY) is part of the Volkswagen Group (OTCPK:VWAGY), the second largest carmaker in the world. It is a luxurious carmaker with a strong focus on electric vehicles. At the same time, the management does not put all "eggs in one basket". The company also produces traditional sports cars. But there is a lot of emphasis on innovations, new products and technologies. One of the most vivid examples that comes to mind is Porsche's co-operation with Boeing (BA) to develop urban air vehicles. This technical brilliance comes at undemanding valuations that I will discuss in this article.

Volkswagen and Porsche

To start with, Porsche is heavily linked to the second largest carmaker in the world. Only Toyota is slightly superior to Volkswagen according to its sales revenue figure.

Source: Statista.com

Porsche owns 53.3% of ordinary shares at Volkswagen. So, the financial performance of one company has a significant effect on another company's stock.

Source: Porsche's web-site

Credit rating agency Moody's confirmed Volkswagen's upper medium grade credit rating. Indeed, best-in-class companies tend to be highly safe. Moreover, quite recently Volkswagen's CEO announced job cuts. Even though it is sad that people are losing their jobs, it will make the company more cost efficient and also allow Volkswagen to conserve cash.

This is also good news for Porsche as it is Volkswagen's main shareholder.

Financial results

I appreciate that it might take some time for Porsche to fully recover its sales after the coronavirus outbreak. However, the company as part of Volkswagen Group is financially sound.

As can be seen from the graphs below, Porsche has been gradually growing its sales and profits. This suggests some stability for the company.

Source: Porsche's web-site

Source: Porsche's web-site

Year 2019 was tough for carmakers. Even though the stock markets around the

This article was written by

Anna Sokolidou profile picture
A research analyst and a freelance writer looking for value investment opportunities. I have several years of investing experience. I am mostly interested in writing about bargain stocks of large companies. My interest is not limited to American companies but extends to firms operating in other countries but listed on US stock exchanges.

Analyst’s Disclosure: I am/we are long POAHY. 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.

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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Comments (16)

"As we all know, Porsche (OTCPK:POAHY) is part of the Volkswagen Group (OTCPK:VWAGY)..." Do you realize that the first sentence of your article is 100% incorrect? POAHY (Porsche SE) is NOT part of the Volkswagen Group. POAHY (stock ticker for Porsche SE) has no direct relations to the Porsche car brand/the recently IPOed Porsche car company. How are people supposed to trust your credibility if you can't even get your facts straight?
Any idea why POAHY has a lower dividend rate than VWAPY? It is supposed to be higher if they distributed all the dividends from VW.
Another indication of the error: "However, the company as part of Volkswagen Group is financially sound." POAHY is not a "part" of Volkswagen Group. It is an owner of Volkswagen Shares.
Do they currently pay a dividend? If so when is the ex-dividend date?
Anna Sokolidou profile picture
They pay dividends once per year. The payment date for 2020 dividends was 10 June.
Do you have any sense as to how the governance issues play out between Prosche SE and Volkswagen Group? Volkswagen Group is cheap and Porsche SE trades at a discount to its Volkswagen Group ownership. There seems to be an immense financial benefit from Porsche SE and Volkswagen Group collapsing their structure into a single entity. At least the Porsche SE discount would go away. Any ideas on probability or timetable?
Anna Sokolidou profile picture
Thank you for your question. But the thing is that Porsche is already part of Volkswagen Group. So, I am not sure if anyone considers linking the companies even more than that.
I'm confused by your answer. There are two Porsches relevant to this conversation. One is the car maker that's part of Volkswagen Group (known as Porsche AG) and the second is the family controlled entity that's the largest shareholder of Volkswagen Group. The second entity is known as Porsche SE - which trades under the ticker PAH3.DE and POAHY. My question is about this second entity. It trades at a massive discount to their implied ownership of Volkswagen Group. The question is why not consolidate Porsche SE and Volkswagen Group to eliminate the discount.
Anna Sokolidou profile picture
Sorry. I misunderstood your question. Actually, I haven't heard anything like that. Even though I regularly read news about Porsche, no-one has even mentioned such a possibility. One of the sources I like is markets.businessinsider.com/...
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