Goodyear Tire & Rubber (NASDAQ: GT) and Bridgestone (OTCMKTS:BRDCY) are both auto/tires/trucks companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.
Risk and Volatility
Goodyear Tire & Rubber has a beta of 1.77, suggesting that its stock price is 77% more volatile than the S&P 500. Comparatively, Bridgestone has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.
This is a summary of current ratings and price targets for Goodyear Tire & Rubber and Bridgestone, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Goodyear Tire & Rubber||0||5||6||0||2.55|
Goodyear Tire & Rubber currently has a consensus target price of $34.56, suggesting a potential upside of 47.74%. Given Goodyear Tire & Rubber’s higher probable upside, analysts clearly believe Goodyear Tire & Rubber is more favorable than Bridgestone.
Earnings and Valuation
This table compares Goodyear Tire & Rubber and Bridgestone’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Goodyear Tire & Rubber||$15.38 billion||0.36||$346.00 million||$3.12||7.49|
|Bridgestone||$32.50 billion||0.85||$2.57 billion||$1.56||11.63|
Bridgestone has higher revenue and earnings than Goodyear Tire & Rubber. Goodyear Tire & Rubber is trading at a lower price-to-earnings ratio than Bridgestone, indicating that it is currently the more affordable of the two stocks.
Goodyear Tire & Rubber pays an annual dividend of $0.56 per share and has a dividend yield of 2.4%. Bridgestone pays an annual dividend of $0.29 per share and has a dividend yield of 1.6%. Goodyear Tire & Rubber pays out 17.9% of its earnings in the form of a dividend. Bridgestone pays out 18.6% 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. Goodyear Tire & Rubber is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
88.0% of Goodyear Tire & Rubber shares are owned by institutional investors. Comparatively, 0.2% of Bridgestone shares are owned by institutional investors. 1.5% of Goodyear Tire & Rubber shares are owned by company insiders. Comparatively, 57.1% of Bridgestone shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This table compares Goodyear Tire & Rubber and Bridgestone’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Goodyear Tire & Rubber||1.64%||14.36%||4.11%|
Goodyear Tire & Rubber beats Bridgestone on 8 of the 15 factors compared between the two stocks.
About Goodyear Tire & Rubber
The Goodyear Tire & Rubber Company, together with its subsidiaries, develops, manufactures, distributes, and sells tires and related products and services worldwide. It offers various lines of rubber tires for automobiles, trucks, buses, aircrafts, motorcycles, earthmoving and mining equipment, farm implements, industrial equipment, and various other applications under the Goodyear, Dunlop, Kelly, Debica, Sava, Fulda, and various other Goodyear owned house brands, as well as under the private-label brands. The company also retreads truck, aviation, and off-the-road tires; manufactures and sells tread rubber and other tire retreading materials; manufactures and markets rubber-related chemicals; and provides automotive and commercial truck maintenance and repair services, and miscellaneous other products and services, as well as sells natural rubber products. In addition, it operates approximately 1,000 tire and auto service center outlets that offer products for retail sale. The company sells its products through a network of independent dealers, regional distributors, retail outlets, and retailers. The Goodyear Tire & Rubber Company was founded in 1898 and is headquartered in Akron, Ohio.
Bridgestone Corporation, together with its subsidiaries, manufactures and sells tires and rubber products worldwide. The company provides tires and tire tubes for passenger cars, trucks, buses, construction/mining vehicles, industrial machines, agricultural machines, aircraft, and motorcycles and scooters; and tire related products, retread materials and services, tire raw materials, and automotive maintenance and repair services. It also offers vehicle parts, polyurethane foam and related products, electronic precision parts, industrial materials related products, civil engineering and construction materials and equipment, and other products; commercial roofing and other materials; golf balls, golf clubs, other sports products; and bicycles, bicycle related and other products, as well as finance and other services. The company was founded in 1931 and is headquartered in Tokyo, Japan.
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