General Motors (GM) & Tata Motors (TTM)

General Motors (NYSE: GM) and Tata Motors (NYSE:TTM) are both large-cap auto/tires/trucks companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Analyst Ratings

This is a breakdown of current recommendations and price targets for General Motors and Tata Motors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
General Motors 2 10 8 1 2.38
Tata Motors 0 2 3 0 2.60

General Motors presently has a consensus target price of $39.39, indicating a potential upside of 10.64%. Tata Motors has a consensus target price of $30.00, indicating a potential upside of 0.03%. Given General Motors’ higher probable upside, equities research analysts clearly believe General Motors is more favorable than Tata Motors.

Profitability

This table compares General Motors and Tata Motors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
General Motors 5.38% 22.45% 4.47%
Tata Motors 3.38% 19.45% 4.54%

Dividends

General Motors pays an annual dividend of $1.52 per share and has a dividend yield of 4.3%. Tata Motors does not pay a dividend. General Motors pays out 26.5% of its earnings in the form of a dividend. General Motors has increased its dividend for 2 consecutive years.

Risk and Volatility

General Motors has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500. Comparatively, Tata Motors has a beta of 2.26, meaning that its share price is 126% more volatile than the S&P 500.

Institutional & Insider Ownership

75.6% of General Motors shares are held by institutional investors. Comparatively, 12.7% of Tata Motors shares are held by institutional investors. 0.0% of General Motors shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares General Motors and Tata Motors’ gross revenue, earnings per share (EPS) 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 6.20
Tata Motors $40.56 billion 0.50 $4.01 billion $1.63 18.40

General Motors has higher revenue and earnings than Tata Motors. General Motors is trading at a lower price-to-earnings ratio than Tata Motors, indicating that it is currently the more affordable of the two stocks.

Summary

General Motors beats Tata Motors on 12 of the 18 factors compared between the two stocks.

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.

Tata Motors Company Profile

Tata Motors Limited is an automobile company. The Company is engaged in manufacture of motor vehicles. The Company is engaged mainly in the business of automobile products consisting of all types of commercial and passenger vehicles, including financing of the vehicles sold by the Company. The Company’s segments include automotive operations and all other operations. The Company’s automotive segment operations include all activities relating to the development, design, manufacture, assembly and sale of vehicles, including vehicle financing, as well as sale of related parts and accessories. In the automotive segment, the Company manufactures and sells passenger cars, utility vehicles, light commercial vehicles, and medium and heavy commercial vehicles. The Company’s all other operations segment mainly includes information technology (IT) services, and machine tools and factory automation services. The Company operates in over 160 countries across the world.

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