Reviewing General Motors (GM) & Toyota Motor Corp Ltd Ord (TM)
General Motors (NYSE: GM) and Toyota Motor Corp Ltd Ord (NYSE:TM) are both large-cap auto/tires/trucks companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.
This is a summary of recent recommendations and price targets for General Motors and Toyota Motor Corp Ltd Ord, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Toyota Motor Corp Ltd Ord||1||4||1||0||2.00|
General Motors presently has a consensus target price of $39.39, suggesting a potential upside of 11.58%. Toyota Motor Corp Ltd Ord has a consensus target price of $112.11, suggesting a potential downside of 0.67%. Given General Motors’ stronger consensus rating and higher probable upside, equities analysts clearly believe General Motors is more favorable than Toyota Motor Corp Ltd Ord.
Risk & Volatility
General Motors has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500. Comparatively, Toyota Motor Corp Ltd Ord has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.
This table compares General Motors and Toyota Motor Corp Ltd Ord’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Toyota Motor Corp Ltd Ord||6.74%||10.39%||3.92%|
General Motors pays an annual dividend of $1.52 per share and has a dividend yield of 4.3%. Toyota Motor Corp Ltd Ord pays an annual dividend of $3.54 per share and has a dividend yield of 3.1%. General Motors pays out 26.5% of its earnings in the form of a dividend. Toyota Motor Corp Ltd Ord pays out 31.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Toyota Motor Corp Ltd Ord has increased its dividend for 2 consecutive years. General Motors is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares General Motors and Toyota Motor Corp Ltd Ord’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|General Motors||$170.23 billion||0.30||$21.49 billion||$5.74||6.15|
|Toyota Motor Corp Ltd Ord||$254.89 billion||0.66||$32.30 billion||$11.40||9.90|
Toyota Motor Corp Ltd Ord has higher revenue and earnings than General Motors. General Motors is trading at a lower price-to-earnings ratio than Toyota Motor Corp Ltd Ord, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
75.6% of General Motors shares are held by institutional investors. Comparatively, 0.9% of Toyota Motor Corp Ltd Ord shares are held by institutional investors. 0.0% of General Motors shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
General Motors beats Toyota Motor Corp Ltd Ord on 11 of the 18 factors compared between the two stocks.
About General Motors
General Motors Company designs, builds and sells cars, trucks, crossovers and automobile parts. The Company’s segments include GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO), GM South America (GMSA) and General Motors Financial Company, Inc. (GM Financial). The Company provides automotive financing services through General Motors Financial Company, Inc. The Company develops, manufactures and/or markets vehicles in North America under the brands, including Buick, Cadillac, Chevrolet and GMC. The Company also develops, manufactures and/or markets vehicles outside North America under the brands, including Buick, Cadillac, Chevrolet, GMC, Holden, Opel and Vauxhall. The Company offers a range of after-sale vehicle services and products through the dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories and extended service warranties. GM Financial is an automotive finance company, which provides automobile finance solutions.
About Toyota Motor Corp Ltd Ord
Toyota Motor Corporation (Toyota) conducts business in the automotive industry. The Company also conducts business in finance and other industries. The Company’s segments include Automotive, Financial Services and All Other. Toyota sells its vehicles in approximately 190 countries and regions. Toyota’s markets for its automobiles are Japan, North America, Europe and Asia. The Company’s Automotive segment includes the design, manufacture, assembly and sale of passenger vehicles, minivans and commercial vehicles, such as trucks and related parts and accessories. The Company’s Financial Services segment consists of providing financing to dealers and their customers for the purchase or lease of Toyota vehicles. The All Other segment includes the design, manufacturing and sale of housing, telecommunications and other businesses. Its information technology related businesses include a Web portal for automobile information called GAZOO.com.
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