Mercedes-Benz vs Ferrari Which Is Stronger?

When it comes to luxury automotive stocks, Mercedes-Benz and Ferrari are two big names that attract investors seeking stable growth and high returns. Mercedes-Benz is known for its long-standing reputation as a reliable and profitable company within the automotive industry, offering a wide range of vehicles for every market segment. On the other hand, Ferrari is synonymous with exclusivity and high-performance vehicles, appealing to wealthy clients and enthusiasts worldwide. Both companies have their unique strengths and weaknesses, making them intriguing options for investors looking to diversify their portfolios.

Mercedes-Benz or Ferrari?

When comparing Mercedes-Benz and Ferrari, 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 Mercedes-Benz and Ferrari.

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. Mercedes-Benz has a dividend yield of 9.24%, while Ferrari has a dividend yield of 0.55%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Mercedes-Benz reports a 5-year dividend growth of 5.20% year and a payout ratio of 50.61%. On the other hand, Ferrari reports a 5-year dividend growth of 22.88% year and a payout ratio of 1.80%.

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 Mercedes-Benz P/E ratio at 5.42 and Ferrari's P/E ratio at 54.15. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Mercedes-Benz P/B ratio is 0.65 while Ferrari's P/B ratio is 23.23.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Mercedes-Benz has seen a 5-year revenue growth of -0.08%, while Ferrari's is 0.81%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Mercedes-Benz's ROE at 11.79% and Ferrari's ROE at 44.82%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $58.50 for Mercedes-Benz and $450.65 for Ferrari. Over the past year, Mercedes-Benz's prices ranged from $53.78 to $83.50, with a yearly change of 55.26%. Ferrari's prices fluctuated between $330.15 and $498.23, with a yearly change of 50.91%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.