Ford Motor vs General Motors Which Is Superior?

When comparing Ford Motor and General Motors stocks, it is important to consider the history, financial performance, and future outlook of both companies. Ford Motor Company, founded in 1903, has faced challenges in recent years with declining sales in certain markets. On the other hand, General Motors, established in 1908, has undergone a successful restructuring following its bankruptcy in 2009. Both companies have significant market share in the automotive industry, but their stock performance may vary based on key factors such as innovation, global economic conditions, and competition.

Ford Motor or General Motors?

When comparing Ford Motor and General Motors, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Ford Motor and General Motors.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Ford Motor has a dividend yield of 8.28%, while General Motors has a dividend yield of 0.99%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Ford Motor reports a 5-year dividend growth of 11.36% year and a payout ratio of 88.50%. On the other hand, General Motors reports a 5-year dividend growth of -25.03% year and a payout ratio of 5.69%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Ford Motor P/E ratio at 12.65 and General Motors's P/E ratio at 5.81. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Ford Motor P/B ratio is 1.01 while General Motors's P/B ratio is 0.91.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Ford Motor has seen a 5-year revenue growth of 0.09%, while General Motors's is 0.21%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Ford Motor's ROE at 8.13% and General Motors's ROE at 16.37%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $11.02 for Ford Motor and $55.97 for General Motors. Over the past year, Ford Motor's prices ranged from $9.49 to $14.85, with a yearly change of 56.48%. General Motors's prices fluctuated between $26.64 and $58.22, with a yearly change of 118.54%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.