Ford Motor (F) versus General Motors (GM) Financial Analysis

General Motors (NYSE: GM) and Ford Motor (NYSE:F) are both large-cap auto/tires/trucks companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, institutional ownership, earnings, profitability and risk.

Valuation & Earnings

This table compares General Motors and Ford Motor’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
General Motors $170.23 billion 0.30 $21.49 billion $5.74 6.07
Ford Motor $153.60 billion 0.27 $13.99 billion $0.95 11.12

General Motors has higher revenue and earnings than Ford Motor. General Motors is trading at a lower price-to-earnings ratio than Ford Motor, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for General Motors and Ford Motor, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
General Motors 2 10 8 1 2.38
Ford Motor 2 11 7 0 2.25

General Motors presently has a consensus target price of $39.39, suggesting a potential upside of 13.09%. Ford Motor has a consensus target price of $12.48, suggesting a potential upside of 18.19%. Given Ford Motor’s higher possible upside, analysts plainly believe Ford Motor is more favorable than General Motors.

Dividends

General Motors pays an annual dividend of $1.52 per share and has a dividend yield of 4.4%. Ford Motor pays an annual dividend of $0.60 per share and has a dividend yield of 5.7%. General Motors pays out 26.5% of its earnings in the form of a dividend. Ford Motor pays out 63.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ford Motor has increased its dividend for 2 consecutive years. Ford Motor is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

General Motors has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500. Comparatively, Ford Motor has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Insider and Institutional Ownership

75.6% of General Motors shares are owned by institutional investors. Comparatively, 55.4% of Ford Motor shares are owned by institutional investors. 0.0% of General Motors shares are owned by company insiders. Comparatively, 1.1% of Ford Motor shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares General Motors and Ford Motor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
General Motors 5.38% 22.45% 4.47%
Ford Motor 2.52% 19.69% 2.52%

Summary

General Motors beats Ford Motor on 13 of the 18 factors compared between the two stocks.

General Motors Company Profile

General Motors Company designs, builds and sells cars, trucks, crossovers and automobile parts. The Company’s segments include GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO), GM South America (GMSA) and General Motors Financial Company, Inc. (GM Financial). The Company provides automotive financing services through General Motors Financial Company, Inc. The Company develops, manufactures and/or markets vehicles in North America under the brands, including Buick, Cadillac, Chevrolet and GMC. The Company also develops, manufactures and/or markets vehicles outside North America under the brands, including Buick, Cadillac, Chevrolet, GMC, Holden, Opel and Vauxhall. The Company offers a range of after-sale vehicle services and products through the dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories and extended service warranties. GM Financial is an automotive finance company, which provides automobile finance solutions.

Ford Motor Company Profile

Ford Motor Company is a global automotive and mobility company. The Company’s business includes designing, manufacturing, marketing, and servicing a full line of Ford cars, trucks, and sport utility vehicles (SUVs), as well as Lincoln luxury vehicles. The Company operates in four segments: Automotive, Financial Services, Ford Smart Mobility LLC, and Central Treasury Operations. The Automotive segment primarily includes the sale of Ford and Lincoln brand vehicles, service parts, and accessories across the world. The Financial Services segment primarily includes its vehicle-related financing and leasing activities at Ford Motor Credit Company LLC. Ford Smart Mobility LLC is a subsidiary formed to design, build, grow, and invest in emerging mobility services. The Central Treasury Operations segment is primarily engaged in decision making for investments, risk management activities, and providing financing for the Automotive segment.

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