Subaru (OTCMKTS:FUJHY) and Volkswagen (OTC:VWAGY) Financial Analysis

Profitability

This table compares Volkswagen and Subaru’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Volkswagen	3.77%	6.35%	1.96%
Subaru	8.36%	15.67%	8.38%

Insider & Institutional Ownership

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

Volatility & Risk

Volkswagen has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500. Comparatively, Subaru has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.

Dividends

Volkswagen pays an annual dividend of $0.65 per share and has a dividend yield of 6.0%. Subaru pays an annual dividend of $0.19 per share and has a dividend yield of 2.0%. Volkswagen pays out 24.6% of its earnings in the form of a dividend. Subaru pays out 10.7% 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.

Earnings & Valuation

This table compares Volkswagen and Subaru”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Volkswagen	$348.78 billion	0.16	$17.97 billion	$2.64	4.11
Subaru	$32.58 billion	0.43	$2.66 billion	$1.77	5.45

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

Summary

Subaru beats Volkswagen on 7 of the 12 factors compared between the two stocks.

About Volkswagen

Volkswagen AG manufactures and sells automobiles primarily in Europe, North America, South America, and the Asia-Pacific. The company operates in four segments: Passenger Cars and Light Commercial Vehicles, Commercial Vehicles, Power Engineering, and Financial Services. The Passenger Cars and Light Commercial Vehicles segment develops vehicles and engines, and light commercial vehicles; and produces and sells passenger cars and related parts. The Commercial Vehicles segment develops, produces, and sells trucks and buses; and offers parts and related services. The Power Engineering segment offers large-bore diesel engines, turbomachinery, special gear units, and propulsion components. The Financial Services segment provides dealer and customer financing, leasing, banking and insurance, fleet management, and mobility services. The company also offers motorcycles. It provides its products under the Volkswagen Passenger Cars, Audi, ŠKODA, SEAT, Bentley, Porsche, Volkswagen Commercial Vehicles, Scania, MAN, Lamborghini, Ducati, and Bugatti brands. Volkswagen AG was incorporated in 1937 and is based in Wolfsburg, Germany. Volkswagen AG operates as a subsidiary of Porsche Automobil Holding SE.

About Subaru

Subaru Corporation manufactures and sells automobiles and aerospace products in Japan, rest of Asia, North America, Europe, and internationally. It operates through three segments: Automotive, Aerospace, and Others. The company manufactures, sells, and repairs passenger cars and their components, aircrafts, aerospace-related machinery, and related components; and rents and manages real estate properties. It is also involved in the shipping, land freight, and warehousing of vehicles; leasing and rental of vehicles; credit and financing of vehicles; inspection, service, and maintenance of aircrafts; and IT system development and operation services. The company was formerly known as Fuji Heavy Industries Ltd. and changed its name to Subaru Corporation in April 2017. The company was founded in 1917 and is headquartered in Tokyo, Japan.