Volkswagen (OTC:VWAGY – Get Free Report) and Ford Motor (NYSE:F – Get Free Report) are both large-cap auto/tires/trucks companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.
Dividends
Volkswagen pays an annual dividend of $0.64 per share and has a dividend yield of 5.7%. Ford Motor pays an annual dividend of $0.60 per share and has a dividend yield of 5.8%. Volkswagen pays out 27.7% of its earnings in the form of a dividend. Ford Motor pays out 41.1% 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.
Volatility & Risk
Volkswagen has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500. Comparatively, Ford Motor has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Volkswagen | 0 | 0 | 0 | 0 | 0.00 |
| Ford Motor | 3 | 10 | 4 | 0 | 2.06 |
Ford Motor has a consensus target price of $11.50, indicating a potential upside of 11.87%. Given Ford Motor’s stronger consensus rating and higher probable upside, analysts plainly believe Ford Motor is more favorable than Volkswagen.
Valuation and Earnings
This table compares Volkswagen and Ford Motor”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Volkswagen | $348.78 billion | 0.16 | $17.97 billion | $2.31 | 4.89 |
| Ford Motor | $184.99 billion | 0.22 | $5.88 billion | $1.46 | 7.04 |
Volkswagen has higher revenue and earnings than Ford Motor. Volkswagen is trading at a lower price-to-earnings ratio than Ford Motor, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Volkswagen and Ford Motor’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% |
| Ford Motor | 3.18% | 16.88% | 2.64% |
Insider & Institutional Ownership
58.7% of Ford Motor shares are held by institutional investors. 0.8% of Ford Motor shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Summary
Ford Motor beats Volkswagen on 11 of the 16 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, ÂKODA, 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 Ford Motor
Ford Motor Company develops, delivers, and services a range of Ford trucks, commercial cars and vans, sport utility vehicles, and Lincoln luxury vehicles worldwide. It operates through Ford Blue, Ford Model e, and Ford Pro; Ford Next; and Ford Credit segments. The company sells Ford and Lincoln vehicles, service parts, and accessories through distributors and dealers, as well as through dealerships to commercial fleet customers, daily rental car companies, and governments. It also engages in vehicle-related financing and leasing activities to and through automotive dealers. In addition, the company provides retail installment sale contracts for new and used vehicles; and direct financing leases for new vehicles to retail and commercial customers, such as leasing companies, government entities, daily rental companies, and fleet customers. Further, it offers wholesale loans to dealers to finance the purchase of vehicle inventory; and loans to dealers to finance working capital and enhance dealership facilities, purchase dealership real estate, and other dealer vehicle programs. The company was incorporated in 1903 and is based in Dearborn, Michigan.
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