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TM, F, and TSLA are top for value, growth, and momentum, respectively
By NATHAN REIFF Updated Sep 21, 2020
The auto industry is made up of companies that manufacture cars, trucks, vans, and commercial vehicles, as well as those that supply automobile parts and service. While these companies are best known for producing passenger vehicles, some of them also make vans and trucks that transport packages and other cargo. Some of the largest and best-known car industry companies include Tesla Inc. (TSLA), now the world’s largest automaker by market value, Toyota Motor Corp. (TM), and General Motors Co. (GM). Car stocks as represented by the First Trust Nasdaq Global Auto ETF (CARZ) have outperformed the broader market. CARZ has provided a 12-month trailing total return of 23.9%, ahead of the Russell 1000’s total return of 15.7%.1 This data and all statistics in the tables below are as of September 17.
Here are the top 3 car stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Car Stocks
These are the car stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Car Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Toyota Motor Corp. (TM)||134.03||187.4||13.2|
|Geely Automobile Holdings Ltd. (GELYF)||2.07||20.3||21.0|
|Honda Motor Co. Ltd. (HMC)||24.97||43.1||23.6|
- Toyota Motor Corp.: Toyota is a Japanese company best known for manufacturing, selling, leasing, and repairing passenger cars, trucks, and buses. Additionally, the company sells financing services, intelligent transportation systems, homes, and pleasure boats. For the company’s Q1 FY 2021, ended June 30, it reported year-over-year (YOY) decreases in sales revenue and net income of 40.4% and 76.3%, respectively. Toyota reported that the spread of COVID-19 had negatively impacted its performance.2
- Geely Automobile Holdings Ltd.: Geely Automobile is a holding company based in Hong Kong that manufactures and sells passenger vehicles through its subsidiaries. The company also exports vehicles.
- Honda Motor Co. Ltd.: Japanese automotive company Honda Motor develops, manufactures, and sells automobiles, motorcycles, and miscellaneous power products including machinery and generators. Like Toyota, Honda provides financing services as well. In its July production, sales, and exports report, released on August 28, the company said that it produced nearly 179,000 automobiles in China, a record high for the month of July in that country. At the same time, production levels in Japan experienced a YOY decrease for the 11th consecutive month.3
Fastest Growing Car Stocks
These are the car stocks with the highest YOY earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Car Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Ford Motor Co. (F)||7.02||27.9||600.0|
|BYD Co. Ltd. (BYDDF)||13.21||36.0||127.7|
|Geely Automobile Holdings Ltd. (GELFY)||2.07||20.3||11.2|
- Ford Motor Co.: Ford designs, builds, and services passenger vehicles and trucks. Additionally, Ford offers financing, leasing, and insurance services through a subsidiary.
- BYD Co. Ltd.: BYD Co. builds automobiles including commercial vehicles, passenger cars, and other vehicles. The company also provides rail transportation construction services, automotive batteries, and related products. BYD is based in China. For H1 2020, BYD reported YOY declines of 2.0% in revenue and a 14.1% gain in gross profit. BYD attributed sluggish revenue to the COVID-19 pandemic as well as lingering trade tensions between the U.S. and China.4
- Geely Automobile Holdings Ltd.: See above for company description.
Car Stocks With the Most Momentum
These are the car stocks that had the highest total return over the last 12 months.
|Car Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Tesla Inc. (TSLA)||441.76||412.4||809.7|
|Workhorse Group. Inc. (WKHS)||26.82||2.8||698.2|
|NIO Inc. (NIO)||19.01||23.2||509.3|
|First Trust Nasdaq Global Auto ETF (CARZ)||N/A||N/A||23.9|
- Tesla Inc.: Tesla designs, builds, and sells electric vehicles and electric vehicle powertrain parts. Tesla sells vehicles directly to consumers and powertrain components to other automobile manufacturers.
- Workhorse Group Inc.: Workhorse Group designs and manufactures electric vehicles as well as aircrafts. The company also provides performance monitoring systems, delivery drones, and other aircrafts. On August 31, Workhorse Group announced that it had entered a strategic agreement with Hitachi America, Ltd. and Hitachi Capital America Corp. Through the partnership, Hitachi will support Workhorse’s increased production and sales requirements.5
- NIO Inc.: Chinese company NIO builds and sells electric vehicles and parts. NIO also offers a range of battery services, including battery charging and battery swapping. In August, NIO delivered 3,965 vehicles, representing a new monthly record and a YOY increase of 104.1%.6