Comparing BYD (OTCMKTS:BYDDF) and NIO (NYSE:NIO)

NIO (NYSE:NIO) and BYD (OTCMKTS:BYDDF) are both auto/tires/trucks companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Profitability

This table compares NIO and BYD’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NIO	-31.17%	-1,085.61%	-21.66%
BYD	N/A	N/A	N/A

Analyst Ratings

This is a summary of current recommendations and price targets for NIO and BYD, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NIO	2	6	3	0	2.09
BYD	0	0	1	0	3.00

NIO currently has a consensus target price of $6.73, indicating a potential upside of 40.54%. BYD has a consensus target price of $85.00, indicating a potential upside of 595.01%. Given BYD’s stronger consensus rating and higher possible upside, analysts clearly believe BYD is more favorable than NIO.

Volatility & Risk

NIO has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, BYD has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500.

Insider and Institutional Ownership

48.6% of NIO shares are held by institutional investors. 1.0% of NIO shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares NIO and BYD”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NIO	$9.01 billion	1.11	-$3.06 billion	($1.45)	-3.30
BYD	$108.10 billion	N/A	$5.60 billion	$0.71	17.23

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

Summary

BYD beats NIO on 9 of the 13 factors compared between the two stocks.

About NIO

NIO Inc. designs, manufactures, and sells electric vehicles in the People's Republic of China. The company is also involved in the manufacture of e-powertrain, battery packs, and components; and racing management, technology development, and sales and after-sales management activities. In addition, it offers power solutions for battery charging needs; and other value-added services. The company was formerly known as NextEV Inc. and changed its name to NIO Inc. in July 2017. NIO Inc. was founded in 2014 and is headquartered in Shanghai, the People's Republic of China.

About BYD

BYD Company Limited, together with its subsidiaries, engages in automobiles and batteries business in the People's Republic of China, Hong Kong, Macau, Taiwan, and internationally. The company operates in two segments: Mobile Handset Components, Assembly Service and Other Products; and Automobiles and Related Products and Other Products. The Mobile Handset Components, Assembly Service and Other Products segment manufactures and sells mobile handset components, such as housings and electronic components; and offers assembly services. The Automobiles and Related Products and Other Products segment is involved in the manufacturing and sale of automobiles, and auto-related molds and components; rail transport and related business; and provision of automobile leasing and after sales services, automobile power batteries, lithium-ion batteries, photovoltaic, and iron battery products. The company develops urban rail transportation business. BYD Company Limited was founded in 1995 and is headquartered in Shenzhen, China.