BMW vs. Mercedes: Who will win the duel between the car giants?

BMW vs. Mercedes: Who will win the duel between the car giants?

BMW and Mercedes-Benz are not only in focus as leading automobile manufacturers in the DAX, but are also facing the challenges of electromobility and digitalization. In the current market environment, both companies have put their market capitalization at around 50-52 billion euros for Mercedes-Benz and 44-48 billion euros for BMW, which illustrates their significant position in the industry. The question investors are asking is which of these two heavyweights offers the better investment opportunity.

In terms of dividend yields, it shows that Mercedes-Benz has a clear advantage with around 8.17% and a planned dividend of €4.30 for 2024. BMW, on the other hand, offers a dividend yield of around 5.4% for 2025 with a dividend of €4.30. Both companies have comparable price-to-earnings ratios, with BMW at around 6.8 - 7.2 and Mercedes-Benz at around 5.3 - 7.3. These numbers suggest that both stocks are currently cheaply valued, which could offer potential for investors.

Financial performance and sales development

The financial situation of the two companies shows significant differences. For 2024, BMW reported sales of 142.38 billion euros, a decrease of 8.4%, and an EBT of 10.97 billion euros, a decrease of 35.8%. In contrast, Mercedes-Benz generated sales of 145.6 billion euros (-4.9%) and an EBIT of 13.6 billion euros (-30.6%). Nevertheless, Mercedes-Benz was able to report a net profit of 10.4 billion euros, while BMW finished with 7.68 billion euros (-36.9%).

In the first quarter of 2025, BMW's sales remained relatively stable at 33.8 billion euros, while Mercedes-Benz was slightly lower at 33.2 billion euros. The sales development is also exemplary: BMW sold 2.45 million vehicles and was able to sell 426,594 battery-operated electric vehicles (BEVs) (+13.5%). Mercedes-Benz, on the other hand, recorded 1.98 million vehicles and a decline in BEVs to 185,100 units (-23%).

Strategic directions and analyst opinions

Both car manufacturers are pursuing ambitious strategic directions. With the introduction of the “New Class” from 2025, BMW is focusing on increased electrification and plans to achieve over 50% of sales with battery-electric vehicles by 2030. Mercedes-Benz, on the other hand, is pursuing the goal of achieving a CO2-neutral new car fleet by 2039 and is investing over 60 billion euros in electrification by 2026.

Analysts show different views on the two stocks. While Jefferies has an optimistic view on BMW with a price target of €92, it is more cautious on Mercedes-Benz and sets the price target at €65 with a “Hold” rating from Stockopedia and Alpha Spread. A consensus of “Buy” is recommended for BMW at €87, highlighting the mixed opinions.

Market comparison and future outlook

Compared to other competitors, the two German car manufacturers don't look bad. Audi, for example, achieved sales of 64.5 billion euros and Porsche achieved 40.1 billion euros with an operating margin of 14.1%. In addition to these statistics, BÖRSE ONLINE's luxury index shows that Mercedes-Benz is represented together with Ferrari and Porsche, which confirms the brand's potential in the premium segment.

Both car companies offer interesting prospects for investors due to their currently low valuations and attractive dividend yields. While Mercedes-Benz offers higher dividend yields, BMW could benefit in the long term from its dynamic development in the BEV sector. Particularly in the current market environment, which emphasizes high dividend yields on auto stocks such as Volkswagen, Tesla and Mercedes, it is advisable to monitor developments closely.