⚙️ Giants of industry: Siemens, Schneider Electric, GE & ABB in a power comparison 💪
Company presentation
- Siemens AG: Headquartered in Germany, Siemens is a global player in the fields of electrification, automation and digitalization. The company operates in a wide range of sectors, including industry, energy, mobility and building technology, and drives technological innovation to increase efficiency and sustainability.
- Schneider Electric SE: The French company Schneider Electric specializes in solutions for energy management and automation. Schneider has a strong focus on sustainable energy and increasing efficiency in various industrial sectors, which gives them a leading position in the industry.
- General Electric (GE): GE is an American industrial conglomerate that focuses on aerospace, energy, healthcare and renewable energy. In recent years, GE has increasingly focused on the development of aviation and divested other businesses.
- ABB Ltd: ABB, based in Switzerland, is a provider of electrification and automation technologies. ABB is particularly known for its innovations in robotics and digital solutions, which have made the company an important partner for industry.
Historical development
- Siemens: Founded in 1847 by Werner von Siemens, the company evolved from a pioneer in telegraph technology to a global innovation leader in automation and electrification technology.
- Schneider Electric: Originally founded in 1836 as a railroad and armaments company, Schneider Electric transformed over time into a company specializing in power distribution and automation.
- GE: Since the merger of Edison General Electric and Thomson-Houston in 1892, GE has pioneered technology in many areas, particularly in aviation and power generation.
- ABB: ABB was formed in 1988 from the merger of Sweden's ASEA and Switzerland's BBC and has since become one of the leading companies in automation and power technology.
Business models
- Siemens: Siemens operates in several segments, including Digital Industries, Smart Infrastructure, Mobility and Siemens Financial Services. The company pursues a business model based on the use of innovative technologies to improve efficiency and sustainability.
- Schneider Electric: Schneider Electric's focus is on digital solutions for energy management and automation. Its business model relies heavily on digitalization to increase sustainability and efficiency.
- GE: GE specializes in cutting-edge technological products, especially in aviation. The company pursues a strategy of diversification, with a clear focus on breakthrough technologies.
- ABB: ABB offers a wide range of products and services in the fields of electrification and automation. Its business model aims to improve operations through innovative software and automation solutions.
Core competencies
- Siemens: Outstanding innovative strength in automation technology, digital infrastructure and mobility solutions.
- Schneider Electric: Market leadership in energy management solutions and digital automation technologies with a strong focus on sustainability.
- GE: Leading position in aviation technology.
- ABB: Expertise in industrial automation, robotics and digital solutions to increase industrial efficiency.
Future prospects and strategic initiatives
- Siemens: Siemens is increasingly focusing on digitalization and sustainable technologies. The "Siemens Xcelerator" initiative is driving the development of digital solutions for a wide range of industries.
- Schneider Electric: Schneider Electric is planning further investments in sustainable technologies and digital solutions to increase energy efficiency worldwide.
- GE: GE is focusing on spinning off non-strategic businesses to focus on aviation and energy.
- ABB: ABB is investing heavily in research and development in artificial intelligence and robotics to further improve its product range and remain at the forefront of industrial innovation.
Market position and competition
- The company
- Market position
- Main competitors
Leader in industrial automation
Strong competition with Schneider Electric
Market leader in energy management
Competition from Siemens and ABB
Dominant in aviation technology
Competition with Boeing in the aviation sector
Leader in industrial automation
Competition with Siemens and Schneider Electric
Total Addressable Market (TAM)
- Siemens: The TAM for digital infrastructure solutions is estimated at several trillion euros.
- Schneider Electric: Schneider Electric sees a TAM in energy management and automation also in the trillions.
- GE: The aviation industry's TAM is estimated at over $800 billion.
- ABB: Industrial automation TAM is in the hundreds of billions of dollars.
Share performance
- Siemens AG: TR 10 years 169%
- Schneider Electric: TR 10 years 395%
- GE Aerospace: TR 10 years 74%
- ABB Ltd: TR 10 years 229%
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Conclusion
In terms of capital efficiency, ABB is clearly the top choice, followed by Schneider Electric, and their valuations are quite similar. However, ABB's domicile in Switzerland makes it a bit more cumbersome to buy its shares.
Looking at the last ten years, Schneider Electric has achieved remarkable results and could be considered a solid choice.
When it comes to innovation potential, Siemens is the most exciting candidate. The brand has a long history and has not always been at the forefront of change, but it has a wide range of interesting businesses. Despite its size, Siemens still has spin-off potential - an option that is often denied but demanded by many shareholders. Such a spin-off could be particularly beneficial, as similar moves have often had a positive effect in the past. The Mobility division, for example, could develop a new, independent focus. In the range between 125 and 145 euros, the share is already very attractive, as the company has strong figures and a leading position in promising areas.
For a rational investment decision, Schneider Electric and ABB combined offer a compelling package - both companies are strongly positioned and cover broad areas of industry, while also delivering excellent financial values.
Personally, I would prefer ABB and Siemens, in which I have not yet invested. Schneider Electric has clearly outperformed, but being based in France brings challenges - from withholding tax to domestic political decisions. The argument that "political stock markets have short legs" does not always apply here, as these factors are sometimes important. In addition, Schneider Electric's diversification is quite concentrated, which doesn't quite fit my idea of an industrial giant. Nevertheless, the share is definitely recommendable.
General Electric (GE), on the other hand, is less interesting for me due to the company's complex structure. Even though the company has just repositioned itself in order to regain its former strength. However, the spin-offs GE Healthcare and Vernova as separate units are definitely interesting, even if they have less to do with the topic now.
In conclusion, Siemens and ABB are well-diversified industrial groups that are driving modernization and automation worldwide and benefiting directly from change. Even in important markets such as Germany, there is still some work to be done, but in the medium term, modernization will hardly be avoidable here either. Both Siemens and ABB are excellently positioned for these developments, as well as in dynamic regions such as the USA and China. So if you want shares in this sector, here is the go-to. Schneider E. for those who really don't want to do without and otherwise ABB or Siemens, with a slight majority for ABB.
$SIE (-0.29%)
$ABBNY (+0.22%)
$GE (+1.41%)
$SU (-0.75%)
