Philips shares: Price analysis before buying or selling

Can I receive dividends when I buy Philips shares?

Yes

ISIN code: NL0000009538

Ticker: AMS: PHIA

Index or market: Euronext Amsterdam

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Elements to consider before selling or buying Philips shares

Analysis N°1

The increasing development of sustainable and environmentally friendly lighting products is a real opportunity for Philips and will be closely monitored.

Analysis N°2

In the same way, the operations carried out by Philips to develop its activities and positioning in emerging markets such as China and India will be monitored.

Analysis N°3

Government programmes or activist incentives to consume differently can also boost sales of more environmentally friendly products for companies like Philips.

Analysis N°4

Of course, competition in this sector is particularly fierce and it will therefore be wise to carry out an analysis of Philips' main opponents and their market shares.

Analysis N°5

The increasingly large and frequent placing on the market of counterfeit products is also a threat to be monitored.

Analysis N°6

As Philips achieves a large part of its sales internationally, exchange rates and their fluctuation will also be taken into account.

Analysis before buying or selling Philips shares

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General presentation of Philips

The Philips group is one of the specialists in the creation, production and marketing of electronic and electrical products. Its activity can be divided into several divisions, mainly medical equipment, then lighting products and electronic equipment for the general public.

Although European, it is in the United States that Philips achieves most of its turnover. It also works a lot with China, Germany and Japan.

Photo credits: ©aa3777/123RF.COM

The major competitors of Philips

We now propose that you discover the competitive environment of the Philips group with a presentation of its main opponents on the market and in its sector of activity, in particular in the medical equipment and lighting segments:

Medtronic

This company specialises in medical technology and has a global presence. Its headquarters are currently located in Dublin, Ireland, but also in Switzerland, in Tolochenaz for the Europe, Middle East and Africa markets and in Singapore for the Asia-Pacific markets.

General Electric or GE

This company is an American conglomerate that was created in 1892 through the merger of part of the Thomson-Houston Electric Company and the Edison General Electric Company. Today, it has more than 36 subsidiaries in 150 countries around the world and is listed on the NYSE, where it has been one of the largest market capitalisations in recent years. The group is headquartered in Fairfield, Connecticut, USA. The General Electric Group's activities are currently divided into 4 divisions with GE Energy Infrastructure, GE Technology Infrastructure, GE Capital and GE Consumer & Industrial.

Siemens

Another important competitor of the Philips group is of course the international group of German origin Siemens. This group specialises in the energy, health, industry and construction sectors. It was founded in 1847 and is based in Munich. The company is also the largest private employer in Germany and the largest engineering company in terms of employees in Europe.

Xiaomi Corporation

Finally, the Chinese electronics and IT group Xiaomi specialises in mobile phones and consumer electronics. It is the third largest smartphone manufacturer but also offers tablets, external batteries, headphones and headsets, game controllers, equipment for connected homes and other products such as miniature cameras, scooters, boxes, routers and smart TVs. In addition and since 2017, the group has also diversified into the connected assistant speaker segment in China with the launch of MI AI Speaker.

The major partners of Philips

Finally, here are some of the main partnerships recently set up by Philips in order to develop its market positioning.

EDF

In 2014, the French group EDF signed a partnership agreement with Philips as part of a project aimed at finding solutions to help consumers make the right choices in terms of reducing energy expenses.

Technicolor

In 2015, Technicolor announced a merger agreement with Philips regarding activities in the field of HDR solutions including content creation tools, encoding and decoding software and technical support for the latter.

Baner Health

In 2017, the Philips Group announced a partnership with US-based Baner Health to develop connected healthcare programmes.

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The factors in favour of a rise in the Philips share price:

First of all, and as far as the strengths of the Philips group are concerned, we can of course talk about its strategic international positioning. Indeed, Philips offers and markets its products in more than a hundred countries around the world. It also has a large workforce of more than 120,000 employees worldwide.

Still with regard to the assets of the Philips group, we can also talk about its important production strength. The company currently owns and operates more than 110 production sites around the world, enabling it to respond quickly and efficiently to demand and to supply its various customers and points of sale by reducing transport costs.

Another undeniable strong point of the Philips group is its significant capacity for innovation. Indeed, Philips invests heavily in research and development in order to stay one step ahead of its competitors and remain one of the market leaders. In particular, it operates seven research and development centres around the world.

Of course, Philips' leadership is another one of its strengths, especially as it operates in a high-value market. In particular, the group is currently the world market leader in cardiac care, acute care and home care, as well as in energy-efficient lighting solutions, and is showing a stable growth rate in these various segments. The advantage of Philips' presence in the emerging markets can also be highlighted here.

The production strategy implemented by the Philips group is of course also a real advantage for this company. Indeed, this group has decided to align its operations with market conditions in order to increase its productivity. In particular, the company has put in place efforts to multiply its management structure with the aim of accelerating execution and reducing its operating costs at the same time. This, of course, has enabled it to improve its overall efficiency and maximize its margins.

Finally, the last advantage enjoyed by this company concerns its clientele, which is particularly loyal over time, especially with regard to consumer electronics products with a very high brand recall.

The factors in favour of a drop in the Philips share price:

Firstly, we can talk about the legal problems that the Philips group has encountered in the past and which have had a negative influence on the company's image. Indeed, the Philips brand has had to face more than fifty antitrust complaints based on class actions which eventually led to the establishment of an investigation into the company. This included the Lite-On digital solution and the CRT division of the group.

Another notable weakness for the Philips Group is that it operates in a highly competitive market, as you can see from the paragraph on the company's main competitors. In particular, competition is very strong in certain specific segments such as electronic devices of local and international brands, with a significant threat to Philips' market shares.

Finally, the last weak point of this company probably concerns its pricing policy which does not enhance it in the face of this competition. Indeed, it can be seen that the products marketed by Philips are often sold at slightly higher prices than those of its competitors, which leads to lower sales and less and less appealing to customers in a period of economic crisis where consumers are primarily seeking to make savings on their daily expenses and this type of purchase.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

What is the shareholder structure of Philips Group?

The Philips Group's capital is currently partly owned by large private institutional shareholders including The Vanguard Group with 3.29% of the shares, Wellington Management with 3.20% of the shares, Amundi Asset Management with 2.79%, BlackRock Investment Management with 2.64%, Capital Research & Management Co World Investors with 2.22%, Norges Bank Investment Management with 1.96%, BNP Paribas Asset Management France with 1.68%, BlackRock Fund Advisors with 1.49%, Fidelity Management & Research with 1.25% and Lyxor International Asset Management with 1.09%.

When and how was Philips founded?

The Philips Group was founded in 1891 by brothers Gerard and Anton Philips in the Netherlands. These two entrepreneurs are none other than the second cousins of Karl Marx. The company started out producing carbon filament lamps and became one of Europe's leading manufacturers of carbon filament lamps in the early 20th century. The first factory of the group is now a museum.

What analysis should be done to study the Philips share price?

To analyse the Philips share price and try to obtain upward or downward signals for this stock, you need to carry out both a technical analysis and a fundamental analysis. The former will be based on the study of stock market charts and their movements and the latter will be based on the most influential news and publications.

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Analysis before buying or selling Philips shares