The American Automobile Industry has come a long way since the Federal Government had to bail out both General Motors and Chrysler. Chrysler is now a foreign based company and GM and Ford are the only two American Automobile Manufacturers remaining (I know Tesla is now making cars but they'll have to make more than one model and a few thousand cars before they're in the league of the other car manufacturers).
Today I just wanted to look at the fundamentals of these two automobile companies and see how they compare with each other. For me the numbers are where the rubber meets the road so this is where I start all of my analysis. It's only after reviewing the numbers that I can start to understand the company and what to expect from investing in their stock.
Today I just wanted to look at the fundamentals of these two automobile companies and see how they compare with each other. For me the numbers are where the rubber meets the road so this is where I start all of my analysis. It's only after reviewing the numbers that I can start to understand the company and what to expect from investing in their stock.
| Ford Motor Co manufactures and distributes automobiles worldwide and operates through two sectors, Automotive and Financial Services. The Automotive sector develops, manufactures, distributes, and services vehicles, parts, and accessories. It offers vehicles primarily under the Ford and Lincoln brand names. This sector markets and sells its products through distributors, dealers and thru dealerships to fleet customers. The Financial Services sector offers its products to and through automotive dealers. It provides financing products, including retail installment sale contracts for new and used vehicles and direct financing leases for new vehicles to retail customers, government entities, daily rental car companies, and fleet customers. This sector offers loans to dealers to finance vehicle inventory, working capital and improvement of dealership facilities, and other dealer vehicle programs. The company was founded in 1903 and is based in Dearborn, Michigan. (Summary) (Company) (Chart) 18 October 2015 Price $15.28 1yr Target $17.75 Analysts 16 Dividend $0.60 Payout Ratio 64.51% 1yr Cap Gain 16.16% Yield 3.92% 1yr Tot Return 20.08% EPS (ttm) $0.93 EPS next yr $1.93 EPS next 5yr 22.17% 1yr Potential $42.78 P/E 16.43 PEG 0.74 Beta 1.29 Market Cap $60.63 Bil Revenues $141.95 Bil Earnings $3.70 Bil Profit Margin 2.60% 1yr EarnGR -54.81% 3yr EarnGR -45.17% 5yr EarnGR -1.44% 1yr DivGR 23.52% 3yr DivGR 1.62% 5yr DivGR --- Quick Ratio --- Current Ratio --- Debt/Equity 4.69 ROA 1.70% ROE 14.50% | General Motors Co designs, builds, and sells cars, crossovers, trucks, and automobile parts worldwide. It operates through GM North America, GM Europe, GM International Operations, GM South America, and GM Financial segments. The company markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Opel, Holden, and Vauxhall brand names, as well as under the Alpheon, Baojun, Jiefang, and Wuling brand names. It also sells cars and trucks to dealers for consumer retail sales, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, the company offers connected safety, security and mobility solutions, and information technology services. The company, through its subsidiary, General Motors Financial Company, Inc., provides automotive financing services. General Motors Company was founded in 1897 and is based in Detroit, Michigan. (Summary) (Company) (Chart) 18 October 2015 Price $33.15 1yr Target $39.93 Analysts 15 Dividend $1.44 Payout Ratio 53.13% 1yr Cap Gain 20.45% Yield 4.34% 1yr Tot Return 24.79% EPS (ttm) $2.71 EPS next yr $5.10 EPS next 5yr 23.20% 1yr Potential $118.32 P/E 12.23 PEG 0.53 Beta 1.64 Market Cap $52.51 Bil Revenues $152.76 Bil Earnings $4.55 Bil Profit Margin 2.97% 1yr EarnGR -51.19% 3yr EarnGR -28.61% 5yr EarnGR --- 1yr DivGR --- 3yr DivGR --- 5yr DivGR --- Quick Ratio 1.00 Current Ratio 1.20 Debt/Equity 1.52 ROA 2.50% ROE 12.40% |
My Perspective
I'm slightly biased in looking at these two companies because I'm a shareholder of Ford Motor Company, but the numbers above make for some interesting comparisons. There's no reason to point out specific differences or how these companies compete globally against some tough competition, because anyone who has gotten this far into this article has already seen the numbers above. My general impression is that the investing community values Ford more than General Motors. That may cause General Motors to be the better investment for new funds. But those funds are also competing against investments in other, less competitive industries.
Obviously the above numbers wouldn't make me sell my shares of Ford because in so many ways its a great investment. What they do is convince me that General Motors is also a great investment and maybe I should be investing in General Motors too.
I expect to open a small position in GM as soon as the price falls closer to the lower Bollinger Band (click on the chart link above). As the shares stand today they're a little extended and look to fall a few dollars soon to a more acceptable level. These shares, once accumulated, will complement my shares in Ford. My intent is to let the dividends reinvest in additional shares of the company. I also intend to sell options once I attain at least one hundred shares of the company. Fortunately that didn't take very long for my shares in Ford. Hopefully it won't take very long for these shares that I'll soon be accumulating in General Motors.
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