Volkswagen AG VZO O.N.
🇩🇪 VOW3.XETRA · Frankfurt · DE0007664039
Consumer
EUR 87.30 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
6.0
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 87.30 ÷ 14.61 = 6.0
TTM period through: 2025-12-31
Forward P/E (estimated): 4.0
Based on analyst estimates
Reference: Provider P/E (Trailing): 6.6
Yield (Fwd)
6.03%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 5.94%
Net Debt/EBITDA (TTM)
5.0x
Latest quarter: 33.5x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 33.5x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
36.0%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 60.9%
Cash Flow Payout (TTM): 29.7%
FCF Coverage (TTM): -2.09x
ROE
3.5%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
3.3x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Volkswagen AG is a major global automaker navigating a capital-intensive transition to electric vehicles amidst escalating trade tariffs. While the deeply depressed valuation (P/E 6.0) and current 5.9% yield appear tempting, the announced 54% dividend cut and negative free cash flow make this unsuitable for conservative dividend strategies. Not recommended for new positions given the severe structural risks and lack of dividend sustainability.
Sector Context
Volkswagen is a major global automotive manufacturer producing consumer and commercial vehicles across multiple brands. The automotive sector is highly cyclical, capital-intensive, and currently undergoing a massive structural transition to electric vehicles, making it fundamentally challenging for conservative dividend investors seeking predictable cash flows.
Temporary Opportunity Identified
Short-term profitability is severely impacted by €4.7 billion in one-time provisions and impairments related to Porsche's realignment, compounded by expected US tariff impacts.
📊 Strategy Analysis
- • Valuation is deeply depressed with a trailing P/E of 5.98 and P/B of 0.25, reflecting extreme market pessimism.
- • The recent quarter's net loss was primarily driven by massive one-time accounting provisions (€4.7B) rather than a complete collapse of ongoing vehicle sales.
⚠ What to Watch
- • Management has proposed a massive 54.4% dividend cut for 2026 to fund its e-mobility transition, undermining the core requirement of income predictability.
- • Free cash flow is heavily negative (-€3.23 billion), meaning current shareholder payouts are unsupported by actual cash generation.
- • Net Debt/EBITDA sits at an elevated 4.95x, far exceeding the conservative 3x threshold, while the company absorbs an estimated €5 billion in new US tariffs.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.