Head-To-Head Analysis: Bridgestone (OTCMKTS:BRDCY) vs. Toyota Motor (NYSE:TM)

Toyota Motor (NYSE:TM) and Bridgestone (OTCMKTS:BRDCY) are both large-cap auto/tires/trucks companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Toyota Motor and Bridgestone, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toyota Motor	2	2	3	0	2.14
Bridgestone	1	0	0	1	2.50

Volatility and Risk

Toyota Motor has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Bridgestone has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500.

Profitability

This table compares Toyota Motor and Bridgestone’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toyota Motor	9.33%	12.32%	4.85%
Bridgestone	N/A	N/A	N/A

Institutional and Insider Ownership

1.5% of Toyota Motor shares are owned by institutional investors. 57.1% of Bridgestone shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Toyota Motor pays an annual dividend of $5.10 per share and has a dividend yield of 2.6%. Bridgestone pays an annual dividend of $0.47 per share and has a dividend yield of 2.1%. Toyota Motor pays out 22.5% of its earnings in the form of a dividend. Bridgestone pays out 34.8% 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. Toyota Motor is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Toyota Motor and Bridgestone”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toyota Motor	$315.45 billion	0.84	$31.45 billion	$22.69	8.66
Bridgestone	$29.30 billion	1.06	$1.88 billion	$1.35	16.75

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

Summary

Toyota Motor beats Bridgestone on 11 of the 16 factors compared between the two stocks.

About Toyota Motor

Toyota Motor Corporation designs, manufactures, assembles, and sells passenger vehicles, minivans and commercial vehicles, and related parts and accessories in Japan, North America, Europe, Asia, Central and South America, Oceania, Africa, and the Middle East. It operates in Automotive, Financial Services, and All Other segments. The company offers subcompact and compact cars; mini-vehicles; mid-size, luxury, sports, and specialty cars; recreational and sport-utility vehicles; pickup trucks; minivans; trucks; and buses. It offers vehicles under the Toyota and Lexus brand names. Further, the company provides financial services, such as retail financing and leasing, wholesale financing, insurance, and credit cards. Additionally, it operates GAZOO.com, a web portal for automobile information, as well as engages in telecommunications and other businesses. The company was founded in 1933 and is headquartered in Toyota, Japan.

About Bridgestone

Bridgestone Corporation, together with its subsidiaries, manufactures and sells tires and rubber products. The company offers tires and tire tubes for passenger cars, trucks, buses, construction and off-road mining vehicles, industrial and agricultural machinery, aircraft, motorcycles, scooters, and other vehicles; automotive parts; automotive maintenance and repair services; and raw materials for tires and other products. It also provides chemical products, such as belts, hoses, rubber crawlers/MT pads, resin piping systems, seismic isolation rubbers, bridge rubber bearings, and block type rubber covered chain type bridge fall prevention devices. In addition, the company offers golf balls, golf clubs, and other sporting goods; bicycles, bicycle-related goods, and others; and finance and other services. It has operations in Japan, the Americas, Europe, Russia, the Middle East, India, Africa, China, Asia, Oceania, Oceania, and internationally. The company was incorporated in 1931 and is headquartered in Tokyo, Japan.