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

Institutional & Insider Ownership

0.9% of Toyota Motor Corp Ltd Ord shares are owned by institutional investors. Comparatively, 75.6% of General Motors shares are owned by institutional investors. 0.0% of General Motors shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Toyota Motor Corp Ltd Ord and General Motors, 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 2 10 8 1 2.38

Toyota Motor Corp Ltd Ord currently has a consensus price target of $112.11, indicating a potential downside of 1.03%. General Motors has a consensus price target of $39.39, indicating a potential upside of 10.83%. Given General Motors’ stronger consensus rating and higher probable upside, analysts plainly believe General Motors is more favorable than Toyota Motor Corp Ltd Ord.

Dividends

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 an annual dividend of $1.52 per share and has a dividend yield of 4.3%. Toyota Motor Corp Ltd Ord pays out 31.1% 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. General Motors has raised its dividend for 2 consecutive years. General Motors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Toyota Motor Corp Ltd Ord and General Motors’ 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 5.38% 22.45% 4.47%

Volatility and Risk

Toyota Motor Corp Ltd Ord has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, General Motors has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500.

Valuation and Earnings

This table compares Toyota Motor Corp Ltd Ord and General Motors’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Toyota Motor Corp Ltd Ord $254.02 billion 0.66 $32.19 billion $11.40 9.94
General Motors $170.23 billion 0.30 $21.49 billion $5.74 6.19

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.

Summary

General Motors beats Toyota Motor Corp Ltd Ord on 12 of the 18 factors compared between the two stocks.

Toyota Motor Corp Ltd Ord Company Profile

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.

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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