Daimler AG was founded in 1926 following the merger of Benz & Cie and Daimler Motoren Gesellschaft, two former automotive rival companies that both claimed to be the inventors of the gasoline-powered engine.
Headquartered in Stuttgart, Germany, Daimler AG is one of the largest and most successful automotive engineering companies in the world. The company develops, produces and distributes automotive products, such as passenger cars, trucks, vans and buses.
Daimler AG operates through 5 distinct segments: Mercedes-Benz Cars, Mercedes-Benz Vans, Daimler Trucks, Daimler Buses and Daimler Financial Services.
Daimler products are available in practically every corner of the world. Their most iconic brand is Mercedes, but Daimler is also the owner of top brands, such as Mitsubishi Fuso and Setra.
A pioneer of automotive engineering, Daimler has continued to lead innovation in the industry. Daimler has led the way in the global clamour for safer, sustainable and greener technologies, and as of January 2020, they boast the widest range of hybrid drives and emission-free electric vehicles.
Daimler AG is listed on both the Frankfurt Stock Exchange and the Stuttgart Stock Exchange, where it trades under the ticker symbol DAI. Daimler stock is also part of the DAX-30 and Euro STOXX 50 indices.
Mergers and Acquisitions
A product of a merger itself, Daimler has always sought opportunities in the mergers and acquisitions market. A standout deal in its history is the Daimler-Chrysler merger of 2007 that was billed as a ‘marriage made in heaven’. But hell was clearly the fate as Daimler would later sell its Chrysler unit after failing to achieve the expected synergy benefits.
With technology changing the automotive space, Daimler has made strategic acquisitions of ridesharing/carpooling companies, such as Via, Flinc and Turo, moves that align the company with its strategy of transitioning from a purely automotive manufacturer to a mobility services provider.
Daimler envisions a future where tech-powered cars will offer multiple opportunities for manufacturers to improve upon their bottom line over the lifetime of their products.
Daimler Stock History
Daimler went public on the 1st of January 1990 and the company has never had a stock split since, as of January 2020. Daimler stock has always mirrored the prevailing global economic environment.
The stock edged higher during the tech boom of the late 1990s, managing to hit its all-time high of just above €100 by May 1998. The subsequent market crash dragged the stock to lows of circa €26 by May 2003.
The recovery that followed propped up the stock to highs of circa €75 by October 2007, before the effects of the global financial crisis in 2008 pressured the stock to its all-time low of just below €18 in February 2009.
As the global economy recovered, Daimler stock also drifted higher to highs of just above €93 by March 2015. A combination of a depressed business environment and a weakening euro (EUR) has since contained the stock between €40 and €90, as of January 2020.
Daimler follows a profit-sharing dividend policy. The company has a target distribution ratio of 40% of the nett profits attributable to Daimler shareholders, and for the last few years, as of January 2020, the net payout ratio has been between 37% and 48%.
How to Trade Daimler Stock
As an automobile inventor, Daimler has seen its stock attract much interest among investors and traders. While a prestigious stock, here are factors that investors should take into account when trading Daimler:
Tariffs and Trade Agreements
As of January 2020, Daimler is the world’s largest truck manufacturer and one of the biggest producers of premium cars. This means that the entire globe serves as Daimler’s market. Furthermore, Daimler has manufacturing plants located across 4 continents, which ensures that tariffs and trade agreements in different jurisdictions can have an impact on the overall costs and margins of the company. This can consequently have an effect on the supply and demand of the stock.
Legislative and Taxation Policy
With a truly global reach (both in operations and market), Daimler is susceptible to a wide range of unique and different legislative and taxation policies. Positive news, such as tax cuts, can trigger a positive movement on the stock’s price, whereas negative news, that includes strict manufacturing legislation, can inspire negative price action.
Lawsuits and Negative PR
Daimler’s massive global reach and wide product portfolio exposes it to potential lawsuits or negative publicity that may inspire caution among investors and pile pressure on the company’s stock price. A recent case is the 2019 investigation by Germany’s motor authority that found Daimler guilty of fitting cheating software in some of their cars. The software that was designed to show Daimler cars as being cleaner than they actually are, and resulted in the company being slapped with fines in excess of $1 billion. The same matter has also attracted a yet-to-be-determined lawsuit filed by investors accusing Daimler of failing to reveal the risks and costs of using such software, contrary to the provisions of the capital markets law. In general, such negative PR usually limits price gains in major companies, such as Daimler.
New Product Rollout
The automobile industry is fast and dynamic, with innovation springing up every other day. Daimler has always sought to be a pioneer in multiple product ranges, such as engines, mobility digitalisation and other product innovations. New product rollouts are big events in the automotive world; hit products inspire big positive price movements, whereas misses can trigger a negative spiral.
Periodic Earnings Reports
Daimler’s fiscal year runs from January to December, and the company releases quarterly earnings reports to keep shareholders updated on its current and potential future business health. Obviously, positive numbers will provide tailwinds for the company’s stock price, while negative figures will be a source of headwinds.
Because the stock price quickly discounts all available information, it is important to monitor these factors for their short to medium-term potential impact rather than for their long-term possible effects.
Disclaimer: This is a general analysis and not to be viewed or construed as actual trading advice or a recommendation of any kind and just an example of how a particular instrument could, potentially, be traded.
Friedberg Direct Daimler Stock Trading Information
MT4/MT5 Symbol: _DAI.DE
Trading Times: Monday – Friday 13:00 – 19:59 London Time GMT
Exchange: Frankfurt Stock Exchange
Typical spread: 0.16%
Minimum Trade Size: 10
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Disclaimer: Please note these are stock CFDs (Contracts for Difference)
When you enter into a CFD trade you don’t buy the actual stock itself but instead agree on a contract with the broker to settle the difference in value between the entry and exit price of the Stock based on the price the stock is trading at on the Exchange it is listed. That means when you trade Stocks CFDs with Friedberg Direct you get a flexibility that stock market rules often make very difficult or even impossible for some.