of Volkswagen-Aktie (WKN: 766403) has not moved for many years. If you had bought the stock five years ago, you would have lost almost 10% at the current price of EUR 131.34 (as of October 18, 2022). At the same time, you would have received a few euros as dividends. But even these would not hit the steering wheel. At least until now! Because in the next few months, Volkswagen shareholders can expect a big rain of money.
Based on current prices, you can see a huge profit of around 20% within a few months. This rain of money has two reasons and unfortunately it will not be repeated every year.
20% dividend in cargo
On the one hand, business at Volkswagen is currently in full swing and Profits are bubbling up like never before. That’s why Volkswagen can currently afford a very high dividend. So that should result in a common dividend that will at least stay the same. This year, 7.56 euros were paid for each preferred share. That alone makes a 5.8% return at the current low price level.
On top of that, Volkswagen is also shedding half of the revenue from what happened a few weeks ago Porsche (WKN: PAG911) IPO to its shareholders. An extraordinary meeting of shareholders will be held in mid-December, the sole purpose of which is to decide on special dividends. So shareholders can expect a generous Christmas present. Volkswagen will pay a total of 19.06 euros per preferred share after the meeting. This results in an incredible return of another 14.5%.
Volkswagen pays only half of the proceeds from the IPO to shareholders. The balance is kept within the group and is used to fund higher investment needs.
Does the Porsche turbo fire now?
In fact, the Porsche IPO could also boost Volkswagen’s stock in the long run. Because Porsche AG is valued on the stock market at around 80 billion euros. This roughly corresponds to the value of the entire Volkswagen Group, which still owns 75% of the shares in Porsche AG! Therefore, the remaining group is not given any value in the stock market.
But since Volkswagen is so profitable, that may be an unrealistic estimate. After all, the group made a net profit of more than 10 billion euros in the first half of the year alone. And this 10 billion does not come only from Porsche, of course.
However, there is of course another possible interpretation. Perhaps investors see Porsche AG’s market valuation as impossibly high. In that case, Porsche’s share price will fall sooner or later and Volkswagen’s share will not benefit from the higher valuation. Maybe it will also end in the middle way. That will depend entirely on how the global auto markets develop in the coming years. But one thing is already certain: we won’t see a 20% dividend again anytime soon.
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Dennis Zeipert does not own any of the shares mentioned. The Motley Fool owns shares of and recommends Porsche Automobil Holding and Volkswagen AG.