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Mercedes-Benz Group AG logo

Mercedes-Benz Group AG

MBGAF
44
Auto - Manufacturers · Consumer Cyclical
Exchange
Other OTC
Winston Score
44
Winston is serious
Mixed quality — meaningful strengths and weaknesses.

Mercedes-Benz Group AG is a German company that makes luxury cars, SUVs, vans, and high-performance vehicles sold under the Mercedes-Benz and AMG brands. It sells to wealthy individual buyers and businesses around the world, competing at the premium end of the auto market. Mercedes-Benz is one of the oldest and most recognized car brands in the world, with roots going back to the invention of the automobile in the 1880s.

The company earns money by selling vehicles and spare parts, and also through its financial services arm, which offers loans and leases to customers buying its cars. Mercedes-Benz operates globally, with major markets in Europe, China, and the United States, and generates roughly €150 billion in annual revenue. Its brand reputation and loyal customer base provide some competitive protection, but the company faces significant pressure from slowing demand in China, rising competition from Chinese electric vehicle makers, and the costly transition to fully electric vehicles.

Winston Score History

Score breakdown

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Quality

Gross Margin
17.3%
Thin — 17.3% gross margin
Operating Margin
5.2%
Thin — 5.2% operating margin
ROCE
0.9%
Weak — 0.9% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY
-8.6%
Shrinking sales (-8.6% YoY)
EPS YoY
-42.7%
Earnings shrinking (-42.7% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency
0/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion
324%
Turns 324% of profit into real cash
FCF Margin
7.1%
Modest free cash flow (7.1%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity
1.04
Elevated debt (1.04)
Interest Cover
15.56x
Comfortably covers interest (15.6x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)
10.2x
no trend
Attractive valuation — P/E 10.2

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward
+3.9
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (10.2 → 6.4)

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Dividends

Dividend Yield
7.64%
no trend
Healthy income — 7.64% yield

Yield above 6% — often a flag the market is pricing in a cut.

Dividend Growth
+77.5%
no trend
Dividend growing fast (77.5% YoY)

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