Mercedes-Benz vs Volvo Car Which Is a Smarter Choice?

Mercedes-Benz and Volvo are two well-known automotive companies in the market, both catering to a luxury segment of the industry. Mercedes-Benz, a division of Daimler AG, is a German multinational corporation known for its high-performance vehicles and innovative technology. On the other hand, Volvo Cars, a Swedish company owned by Geely, is renowned for its commitment to safety and sustainability. Investors often compare the performance of their stocks to determine which company offers the best investment opportunity in the automotive sector.

Mercedes-Benz or Volvo Car?

When comparing Mercedes-Benz and Volvo Car, 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 Volvo Car.

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 9.73%, while Volvo Car has a dividend yield of 1.69%. 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, Volvo Car 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 Mercedes-Benz P/E ratio at 5.07 and Volvo Car's P/E ratio at 10.88. 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 0.61 while Volvo Car's P/B ratio is 1.00.

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 Volvo Car's is -0.34%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Mercedes-Benz's ROE at 11.79% and Volvo Car's ROE at 9.62%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $55.57 for Mercedes-Benz and $4.22 for Volvo Car. Over the past year, Mercedes-Benz's prices ranged from $53.78 to $83.50, with a yearly change of 55.26%. Volvo Car's prices fluctuated between $3.97 and $8.15, with a yearly change of 105.29%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.