Ford Motor vs Toyota Motor Which Is a Better Investment?

Ford Motor and Toyota Motor are two of the biggest players in the automotive industry. Both companies have a long history of producing high-quality vehicles with a strong focus on innovation and sustainability. When comparing their stocks, Ford has struggled with profitability and market share fluctuations in recent years, while Toyota has maintained a more stable financial performance. Investors looking to invest in the automotive sector should carefully consider the financial health and growth potential of both companies before making a decision.

Ford Motor or Toyota Motor?

When comparing Ford Motor and Toyota Motor, 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 Toyota Motor.

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 Toyota Motor has a dividend yield of 2.75%. 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, Toyota Motor reports a 5-year dividend growth of 2.65% year and a payout ratio of 23.74%.

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 Toyota Motor's P/E ratio at 8.54. 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 Toyota Motor's P/B ratio is 1.06.

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 Toyota Motor's is 0.36%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Ford Motor's ROE at 8.13% and Toyota Motor's ROE at 12.46%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $10.35 for Ford Motor and $176.82 for Toyota Motor. Over the past year, Ford Motor's prices ranged from $9.49 to $14.85, with a yearly change of 56.48%. Toyota Motor's prices fluctuated between $159.04 and $255.23, with a yearly change of 60.48%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.