Critical Survey: Volkswagen (OTCMKTS:VWAGY) and Mazda Motor (OTCMKTS:MZDAF)

Mazda Motor (OTCMKTS:MZDAF) and Volkswagen (OTCMKTS:VWAGY) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Valuation and Earnings

This table compares Mazda Motor and Volkswagen”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mazda Motor	N/A	N/A	N/A	$341.27	0.02
Volkswagen	$364.13 billion	0.12	$8.29 billion	$1.22	6.98

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

Dividends

Mazda Motor pays an annual dividend of $3.98 per share and has a dividend yield of 55.7%. Volkswagen pays an annual dividend of $0.35 per share and has a dividend yield of 4.1%. Mazda Motor pays out 1.2% of its earnings in the form of a dividend. Volkswagen pays out 28.7% 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. Mazda Motor is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mazda Motor	N/A	N/A	N/A
Volkswagen	1.68%	2.74%	0.85%

Insider & Institutional Ownership

19.4% of Mazda Motor shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Mazda Motor and Volkswagen, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mazda Motor	0	0	0	0	0.00
Volkswagen	1	1	2	1	2.60

Summary

Volkswagen beats Mazda Motor on 8 of the 12 factors compared between the two stocks.

About Mazda Motor

Mazda Motor Corporation engages in the manufacture and sale of passenger cars and commercial vehicles in Japan, China, North America, Europe, and internationally. The company was formerly known as Toyo Kogyo Co., Ltd. and changed its name to Mazda Motor Corporation in May 1984. Mazda Motor Corporation was incorporated in 1920 and is headquartered in Hiroshima, Japan.

About Volkswagen

Volkswagen AG manufactures and sells automobiles in Germany, other European countries, North America, South America, the Asia-Pacific, and internationally. The company operates through four segments: Passenger Cars and Light Commercial Vehicles, Commercial Vehicles, Power Engineering, and Financial Services. The Passenger Cars and Light Commercial Vehicles segment engages in the development of vehicles, engines, and vehicle software; produces and sells passenger cars and light commercial vehicles, and related parts; and offers motorcycles. 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, and propulsion components. The Financial Services segment provides dealership and customer financing, leasing, direct banking and insurance, fleet management, and mobility services. It sells its products under the Volkswagen Passenger Cars, koda, SEAT/CUPRA, Volkswagen Commercial Vehicles, Audi, Lamborghini, Bentley, Ducati, Porsche, Scania, MAN, Volkswagen Truck & Bus, Navistar commercial vehicles, and Bugatti brands. The company was founded in 1937 and is headquartered in Wolfsburg, Germany. Volkswagen AG operates as a subsidiary of Porsche Automobil Holding SE.