Ford Motor vs Tesla Which Should You Buy?

Ford Motor Company and Tesla Inc. are two major players in the automotive industry, each with a unique approach to the market. Ford, a longstanding and well-established company, has a history of producing reliable and popular vehicles. Tesla, on the other hand, is a relatively newer player in the industry but has quickly gained a reputation for its innovative electric vehicles and technology. This has led to a comparison of their stocks, as investors weigh the potential of these companies in the ever-evolving automotive market.

Ford Motor or Tesla?

When comparing Ford Motor and Tesla, 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 Tesla.

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 Tesla has a dividend yield of -%. 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, Tesla reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

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 Tesla's P/E ratio at 109.81. 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 0.93 while Tesla's P/B ratio is 19.95.

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 Tesla's is 2.63%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Ford Motor's ROE at 8.13% and Tesla's ROE at 19.29%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $10.32 for Ford Motor and $415.71 for Tesla. Over the past year, Ford Motor's prices ranged from $9.49 to $14.85, with a yearly change of 56.48%. Tesla's prices fluctuated between $138.80 and $436.30, with a yearly change of 214.34%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.