VOLVO AB/ADR (VLVLY) and General Motors (GM) Financial Analysis
VOLVO AB/ADR (OTCMKTS:VLVLY) and General Motors (NYSE:GM) are both large-cap auto/tires/trucks companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.
Risk and Volatility
VOLVO AB/ADR has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, General Motors has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.
This table compares VOLVO AB/ADR and General Motors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
VOLVO AB/ADR pays an annual dividend of $0.38 per share and has a dividend yield of 2.8%. General Motors pays an annual dividend of $1.52 per share and has a dividend yield of 4.4%. VOLVO AB/ADR pays out 30.9% of its earnings in the form of a dividend. General Motors pays out 23.0% 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. General Motors is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares VOLVO AB/ADR and General Motors’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|VOLVO AB/ADR||$39.24 billion||0.71||$2.46 billion||$1.23||11.09|
|General Motors||$145.59 billion||0.34||-$3.86 billion||$6.62||5.25|
VOLVO AB/ADR has higher earnings, but lower revenue than General Motors. General Motors is trading at a lower price-to-earnings ratio than VOLVO AB/ADR, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings for VOLVO AB/ADR and General Motors, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
General Motors has a consensus target price of $45.60, indicating a potential upside of 31.30%. Given General Motors’ stronger consensus rating and higher possible upside, analysts clearly believe General Motors is more favorable than VOLVO AB/ADR.
Insider and Institutional Ownership
0.1% of VOLVO AB/ADR shares are owned by institutional investors. Comparatively, 75.7% of General Motors shares are owned by institutional investors. 0.4% of General Motors shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
General Motors beats VOLVO AB/ADR on 10 of the 16 factors compared between the two stocks.
About VOLVO AB/ADR
AB Volvo (publ), together with its subsidiaries, manufactures and sells trucks, buses, construction equipment, and marine and industrial engines in Europe, North America, South America, Asia, and internationally. The company offers trucks for long-haulage, construction, and distribution purposes under the Volvo, UD, Renault, Mack, Eicher, and Dongfeng Trucks brands; and city and intercity buses, coaches, and bus chassis under the Volvo, UD, Prevost, and Nova Bus brands. It also provides construction equipment, including excavators, wheel loaders and haulers, and road machinery under the brand names of Volvo, SDLG, and Terex Trucks. In addition, the company offers diesel engines for leisure boats; marine propulsion systems; drive systems and engines for propulsion and auxiliary equipment, and marine generator sets; and industrial engines for use in container terminals, mines, and other industrial applications under the Volvo Penta brand name. Further, it provides financial solutions, such as customer financing and leasing, dealer financing, and insurance; rental, preventive maintenance, assistance, and IT services; spare parts; and transport information systems. The company offers its products and services through a network of dealerships and workshops. AB Volvo (publ) was founded in 1915 and is headquartered in Gothenburg, Sweden.
About General Motors
General Motors Company, together with its subsidiaries, designs, builds, and sells cars, trucks, crossovers, and automobile parts worldwide. The company operates through GM North America, GM International, and GM Financial segments. It markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Holden, Baojun, Jiefang, and Wuling brand names. The company also sells cars, trucks, and crossovers to dealers for consumer retail sales, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, it offers connected safety, security, and mobility solutions, as well as information technology services. Further, the company provides automotive financing services. General Motors Company was founded in 1897 and is based in Detroit, Michigan.
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