Financial Comparison: REE Automotive (NASDAQ:REE) vs. Goodyear Tire & Rubber (NASDAQ:GT)

Goodyear Tire & Rubber (NASDAQ:GT) and REE Automotive (NASDAQ:REE) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for Goodyear Tire & Rubber and REE Automotive, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Goodyear Tire & Rubber	2	3	2	0	2.00
REE Automotive	1	0	0	0	1.00

Goodyear Tire & Rubber currently has a consensus target price of $8.06, suggesting a potential upside of 87.88%. Given Goodyear Tire & Rubber’s stronger consensus rating and higher probable upside, research analysts clearly believe Goodyear Tire & Rubber is more favorable than REE Automotive.

Profitability

This table compares Goodyear Tire & Rubber and REE Automotive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Goodyear Tire & Rubber	-14.37%	-2.95%	-0.50%
REE Automotive	N/A	N/A	N/A

Insider and Institutional Ownership

84.2% of Goodyear Tire & Rubber shares are owned by institutional investors. Comparatively, 12.7% of REE Automotive shares are owned by institutional investors. 0.5% of Goodyear Tire & Rubber shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Goodyear Tire & Rubber has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, REE Automotive has a beta of 2.4, indicating that its stock price is 140% more volatile than the S&P 500.

Valuation & Earnings

This table compares Goodyear Tire & Rubber and REE Automotive”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Goodyear Tire & Rubber	$18.28 billion	0.07	-$1.72 billion	($8.83)	-0.49
REE Automotive	$1.30 million	1.87	-$55.81 million	($5.28)	-0.01

REE Automotive has lower revenue, but higher earnings than Goodyear Tire & Rubber. Goodyear Tire & Rubber is trading at a lower price-to-earnings ratio than REE Automotive, indicating that it is currently the more affordable of the two stocks.

Summary

REE Automotive beats Goodyear Tire & Rubber on 8 of the 14 factors compared between the two stocks.

About Goodyear Tire & Rubber

Goodyear Tire & Rubber Co. engages in the development, manufacture, distribution, and sale of tires. It operates through the following geographical segments: Americas, Europe, Middle East, and Africa, and Asia Pacific. The Americas segment is involved in the development, manufacture, distribution, and sale of tires and related products and services in North, Central, and South America. The Europe, Middle East, and Africa segment focuses on the development, manufacture, distribution, and sale of tires for automobiles, trucks, buses, aircraft, motorcycles, earthmoving, mining, and industrial equipment throughout Europe, the Middle East, and Africa. The Asia Pacific segment refers to the development, manufacture, distribution, and sales of tires for automobiles, trucks, buses, aircraft, farm, earthmoving, mining, and industrial equipment throughout the Asia Pacific region. The company was founded by Frank A. Seiberling on August 29, 1898 and is headquartered in Akron, OH.

About REE Automotive

REE Automotive Ltd. operates as an automotive technology company in France, the United Kingdom, the United States, and internationally. The company offers REEcorner, a compact module that integrates critical vehicle drive components comprising as steering, braking, suspension, powertrain, and control between the chassis and the wheel; and REEplatform that allows for the addition of a modular and customizable top hat/cabin design based on customer specifications, without requiring modification to the platform. It also provides P7-S Strip Chassis for commercial delivery vehicles and walk-in vans; P7-C Chassis Cab and Cutway Chassis, a class 4 chassis cab fully electric commercial truck for delivery and a range of vocational applications; and P7-B Box Truck, a class 3 box truck built on a P7 cab chassis with its all-wheel drive and all-wheel steer for vehicle control for better handling and safety in adverse conditions. It serves original equipment manufacturer, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, mobility-as-a-service providers, and autonomous drive companies. The company is headquartered in Herzliya, Israel.