Alstom SA is an active manufacturer of rolling stock, spanning passenger rail transportation, locomotives and signalling infrastructure. The French-based firm has had a hand in several big-ticket railway projects through the years, including the TGV and AGV in western Europe, as well as the Eurostar connecting the UK and mainland Europe. It also pioneered the New Pendolino high-speed trains that bend around corners for optimal speed.
The history of Alstom spans almost a century, having been established in 1928. In 1989, it completed a high-profile merger with British firm General Electric Company. The following decade, it acquired a string of firms in Germany and Italy to enhance its position as a leading rolling stock manufacturer in Europe.
Unfortunately, the firm has twice encountered financial issues, both in 2003 and 2004. The former saw Alstom require a bailout from the French government. Alstom came close to merging with German firm Siemens Mobility in 2017, but the deal was denied by the European Commission. A later acquisition of Bombardier Transportation was eventually closed by Alstom in January 2021 to solidify its in-house capabilities.
Before the global financial crash in 2008, the Alstom share price was thriving. It soared from €15 a share in 2005 to an all-time high of €75.36 in May 2008 before seeing Alstom stock fall by over 50% by October 2008.
Between 2008 and early 2016, Alstom’s share price had remained largely flat, but it experienced a steady improvement between 2017 and early 2021, reaching a high of €47.62 in January 2021. September 2022 saw Alstom shares plunge to lows not seen since the autumn of 2005, trading at €16.75 amid the threat of another global economic downturn and rampant inflation affecting manufacturing costs.
When investing in Alstom shares, it’s important to consider the wider macroeconomic factors. The costs of manufacturing new rolling stock have understandably risen in the last year or two, with the supply of raw materials becoming more expensive and therefore costly to produce. It’s therefore important to listen out for news surrounding the next big-ticket projects involving Alstom to ensure they are still going ahead before investing.
Alternatively, you could look at using a contracts for difference (CFD) broker to take short (sell) positions as well as long (buy) positions on the Alstom share price. This would allow you to profit even if Alstom shares decline.
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* The spreads provided are a reflection of the time-weighted average. Though Skilling attempts to provide competitive spreads during all trading hours, clients should note that these may vary and are susceptible to underlying market conditions. The above is provided for indicative purposes only. Clients are advised to check important news announcements on our Economic Calendar, which may result in the widening of spreads, amongst other instances.
The above spreads are applicable under normal trading conditions. Skilling has the right to amend the above spreads according to market conditions as per the 'Terms and Conditions'.
Which are the competitors of Alstom shares?
Alstom's main competitors in the international energy market include Siemens, General Electric, Mitsubishi Hitachi Power Systems (MHPS), and Ansaldo Energia. Other notable competitors in the global transportation industry are Bombardier Transportation, CAF, CRRC Corporation Limited, Stadler Rail Group, Hyundai Rotem Company and China CNR Corporation Limited. Alstom is the leading manufacturer of high-speed trains, while its competitors in this market include CAF, Bombardier Transportation and Siemens.
In addition, Alstom's main competitors in the signaling systems market are Siemens, Thales Group and Hitachi Rail. As such, these companies pose a significant competitive threat to Alstom in the areas of energy, transportation and signaling systems.
Who owns most Alstom shares?
Alstom's largest shareholder is the Caisse de dépôt et placement du Québec (CDPQ), who owns 64,893,536 shares representing 17.2% of its total capital. Other major shareholders include Causeway Capital Management LLC with 18,762,924 shares (4.99%), The Vanguard Group, Inc. with 8,063,822 shares (2.14%), DWS Investment GmbH with 7,962,551 shares (2.12%) and Franklin Mutual Advisers LLC who holds 7,619,722 shares (2.03%). All shareholders are managed by BNP Paribas appointed by Alstom to act as their share registration agent.
Do Alstom pay dividends?
Alstom has been consistent in paying a quarterly dividend to its shareholders. As of 2023, Alstom has paid out quarterly dividend of €0.06 per share with a dividend yield of 0.90%. The company has also paid out a special dividend in 2019 of €5.50 per share. Investing in Alstom could be a wise decision for those looking for regular dividends as well as potential special dividend payments.
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