Ford Motor vs Mercedes-Benz Which Is a Smarter Choice?

Ford Motor and Mercedes-Benz stocks are two prominent automotive companies that have been long-standing competitors in the global market. Ford, an American multinational automaker known for its popular lineup of trucks and SUVs, has faced challenges in recent years due to declining sales and restructuring efforts. On the other hand, Mercedes-Benz, a German luxury car manufacturer, has maintained a strong position in the high-end automotive market with its innovative technology and stylish designs. Investors often compare these two stocks to assess the performance and prospects of the automotive industry as a whole.

Ford Motor or Mercedes-Benz?

When comparing Ford Motor and Mercedes-Benz, 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 Mercedes-Benz.

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 7.51%, while Mercedes-Benz has a dividend yield of 9.24%. 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, Mercedes-Benz reports a 5-year dividend growth of 5.20% year and a payout ratio of 50.61%.

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 11.71 and Mercedes-Benz's P/E ratio at 5.42. 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 0.93 while Mercedes-Benz's P/B ratio is 0.65.

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 Mercedes-Benz's is -0.08%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Ford Motor's ROE at 8.13% and Mercedes-Benz's ROE at 11.79%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $10.35 for Ford Motor and $58.50 for Mercedes-Benz. Over the past year, Ford Motor's prices ranged from $9.49 to $14.85, with a yearly change of 56.48%. Mercedes-Benz's prices fluctuated between $53.78 and $83.50, with a yearly change of 55.26%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.