Honda Motor (NYSE: HMC) and General Motors (NYSE:GM) are both large-cap auto/tires/trucks companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.
Volatility and Risk
Honda Motor has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, General Motors has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500.
Honda Motor pays an annual dividend of $0.75 per share and has a dividend yield of 2.7%. General Motors pays an annual dividend of $1.52 per share and has a dividend yield of 4.4%. Honda Motor pays out 22.9% of its earnings in the form of a dividend. General Motors pays out 26.5% 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. Honda Motor has raised its dividend for 3 consecutive years and General Motors has raised its dividend for 2 consecutive years.
This table compares Honda Motor and General Motors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
2.6% of Honda Motor shares are held by institutional investors. Comparatively, 76.0% of General Motors shares are held by institutional investors. 0.0% of General Motors shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Honda Motor and General Motors’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Honda Motor||$128.93 billion||0.39||$12.12 billion||$3.28||8.40|
|General Motors||$170.23 billion||0.30||$21.49 billion||$5.74||6.09|
General Motors has higher revenue and earnings than Honda Motor. General Motors is trading at a lower price-to-earnings ratio than Honda Motor, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations and price targets for Honda Motor and General Motors, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Honda Motor currently has a consensus price target of $33.18, suggesting a potential upside of 20.39%. General Motors has a consensus price target of $39.39, suggesting a potential upside of 12.77%. Given Honda Motor’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Honda Motor is more favorable than General Motors.
General Motors beats Honda Motor on 12 of the 18 factors compared between the two stocks.
Honda Motor Company Profile
Honda Motor Co., Ltd. (Honda) develops, manufactures and markets motorcycles, automobiles and power products across the world. The Company’s segments include Motorcycle Business, Automobile business, Financial services business, and Power product and other businesses. The Company produces a range of motorcycles, with engine displacement ranging from the 50 cubic centimeters class to the 1,800 cubic centimeters class. Its automobiles use gasoline engines of three, four or six cylinder, diesel engines, gasoline-electric hybrid systems and gasoline-electric plug-in hybrid systems. Honda offers a range of financial services to its customers and dealers through finance subsidiaries in countries, including Japan, the United States, Canada, the United Kingdom, Germany, Brazil and Thailand. Honda manufactures a range of power products, including general-purpose engines, generators, water pumps, lawn mowers, riding mowers, grass cutters, brush cutters, tillers and snow blowers.
General Motors Company Profile
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.
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