Mercedes-Benz Group (OTCMKTS:MBGYY) and Volkswagen (OTCMKTS:VWAGY) Head to Head Contrast

Mercedes-Benz Group (OTCMKTS:MBGYY) and Volkswagen (OTCMKTS:VWAGY) are both large-cap auto/tires/trucks companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Dividends

Mercedes-Benz Group pays an annual dividend of C$0.81 per share and has a dividend yield of 5.4%. Volkswagen pays an annual dividend of $0.45 per share and has a dividend yield of 4.1%. Mercedes-Benz Group pays out 24.6% of its earnings in the form of a dividend. Volkswagen pays out 24.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Mercedes-Benz Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Mercedes-Benz Group and Volkswagen”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mercedes-Benz Group	$157.56 billion	0.37	$11.05 billion	C$3.29	4.60
Volkswagen	$351.35 billion	0.16	$12.28 billion	$1.81	6.03

Volkswagen has higher revenue and earnings than Mercedes-Benz Group. Mercedes-Benz Group is trading at a lower price-to-earnings ratio than Volkswagen, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations for Mercedes-Benz Group and Volkswagen, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercedes-Benz Group	0	6	0	0	2.00
Volkswagen	0	5	1	0	2.17

Profitability

This table compares Mercedes-Benz Group and Volkswagen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mercedes-Benz Group	4.85%	7.24%	2.57%
Volkswagen	2.57%	4.21%	1.31%

Risk and Volatility

Mercedes-Benz Group has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Volkswagen has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500.

Summary

Mercedes-Benz Group beats Volkswagen on 7 of the 13 factors compared between the two stocks.

About Mercedes-Benz Group

Mercedes-Benz Group AG operates as an automotive company in Germany and internationally. It operates through Mercedes-Benz Cars, Mercedes-Benz Vans, and Mercedes-Benz Mobility segments. The company develops, manufactures, and sells cars and vans under the Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach, G-Class brands, as well as related spare parts and accessories. It also provides financing, leasing, car subscription and rental, fleet management, insurance brokerage, and mobility services, as well as digital services for charging and payment. The company was formerly known as Daimler AG and changed its name to Mercedes-Benz Group AG in February 2022. Mercedes-Benz Group AG was founded in 1886 and is headquartered in Stuttgart, Germany.

About Volkswagen

Volkswagen AG manufactures and sells automobiles in Germany, other European countries, North America, South America, the Asia-Pacific, and internationally. The company operates through four segments: Passenger Cars and Light Commercial Vehicles, Commercial Vehicles, Power Engineering, and Financial Services. The Passenger Cars and Light Commercial Vehicles segment engages in the development of vehicles, engines, and vehicle software; produces and sells passenger cars and light commercial vehicles, and related parts; and offers motorcycles. The Commercial Vehicles segment develops, produces, and sells trucks and buses; and offers parts and related services. The Power Engineering segment offers large-bore diesel engines, turbomachinery, and propulsion components. The Financial Services segment provides dealership and customer financing, leasing, direct banking and insurance, fleet management, and mobility services. It sells its products under the Volkswagen Passenger Cars, koda, SEAT/CUPRA, Volkswagen Commercial Vehicles, Audi, Lamborghini, Bentley, Ducati, Porsche, Scania, MAN, Volkswagen Truck & Bus, Navistar commercial vehicles, and Bugatti brands. The company was founded in 1937 and is headquartered in Wolfsburg, Germany. Volkswagen AG operates as a subsidiary of Porsche Automobil Holding SE.