General Motors vs General Electric Which Offers More Value?

When comparing General Motors (GM) and General Electric (GE) stocks, it is important to consider the respective industries in which each company operates. GM is a prominent player in the automotive industry, while GE is a conglomerate with diverse business segments such as power, aviation, and healthcare. Factors such as market trends, financial performance, and potential for growth should be taken into account when deciding which stock may be a better investment option for individual investors.

General Motors or General Electric?

When comparing General Motors and General Electric, 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 General Motors and General Electric.

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. General Motors has a dividend yield of 1.0%, while General Electric has a dividend yield of 0.52%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. General Motors reports a 5-year dividend growth of -25.03% year and a payout ratio of 5.69%. On the other hand, General Electric reports a 5-year dividend growth of -2.87% year and a payout ratio of 12.65%.

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 General Motors P/E ratio at 5.75 and General Electric's P/E ratio at 30.96. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. General Motors P/B ratio is 0.90 while General Electric's P/B ratio is 10.25.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, General Motors has seen a 5-year revenue growth of 0.21%, while General Electric's is -0.44%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with General Motors's ROE at 16.37% and General Electric's ROE at 26.39%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $56.95 for General Motors and $175.89 for General Electric. Over the past year, General Motors's prices ranged from $27.53 to $59.39, with a yearly change of 115.73%. General Electric's prices fluctuated between $94.31 and $194.80, with a yearly change of 106.55%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.