VOLKSWAGEN AG/ADR (OTCMKTS:VWAGY) versus Honda Motor (OTCMKTS:HMC) Head-To-Head Survey

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VOLKSWAGEN AG/ADR (OTCMKTS:VWAGY) and Honda Motor (NYSE:HMC) are both large-cap auto/tires/trucks companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Analyst Recommendations

This is a summary of recent ratings and target prices for VOLKSWAGEN AG/ADR and Honda Motor, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VOLKSWAGEN AG/ADR 0 1 1 0 2.50
Honda Motor 0 1 2 0 2.67

Earnings and Valuation

This table compares VOLKSWAGEN AG/ADR and Honda Motor’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
VOLKSWAGEN AG/ADR $278.54 billion 0.31 $14.33 billion $2.78 6.26
Honda Motor $143.35 billion 0.33 $5.49 billion $3.12 8.49

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

Insider & Institutional Ownership

0.1% of VOLKSWAGEN AG/ADR shares are held by institutional investors. Comparatively, 2.1% of Honda Motor shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

VOLKSWAGEN AG/ADR pays an annual dividend of $0.34 per share and has a dividend yield of 2.0%. Honda Motor pays an annual dividend of $0.82 per share and has a dividend yield of 3.1%. VOLKSWAGEN AG/ADR pays out 12.2% of its earnings in the form of a dividend. Honda Motor pays out 26.3% 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. Honda Motor has raised its dividend for 5 consecutive years. Honda Motor is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares VOLKSWAGEN AG/ADR and Honda Motor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VOLKSWAGEN AG/ADR 4.85% 9.88% 2.52%
Honda Motor 3.92% 6.97% 2.97%

Risk and Volatility

VOLKSWAGEN AG/ADR has a beta of 1.94, suggesting that its stock price is 94% more volatile than the S&P 500. Comparatively, Honda Motor has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.

Summary

Honda Motor beats VOLKSWAGEN AG/ADR on 9 of the 15 factors compared between the two stocks.

About Honda Motor

Honda Motor Co., Ltd. develops, manufactures, and distributes motorcycles, automobiles, power products, and other products worldwide. The company operates through four segments: Motorcycle Business, Automobile Business, Financial Services Business, and Power Product and Other Businesses. The Motorcycle Business segment produces sports models, including trial and moto-cross racing vehicles; business and commuter models; all-terrain vehicles; and side-by-side models. The Automobile Business segment offers passenger cars, light trucks, and mini vehicles, as well as vehicles powered with alternative fuel, such as ethanol, battery electric, and fuel cell vehicles. The Financial Services Business segment provides various financial services, including retail lending and leasing services to customers, as well as other financial services comprising wholesale financing to dealers. The Power Product and Other Businesses segment manufactures and sells various power products consisting of general-purpose engines, generators, water pumps, lawn mowers, riding mowers, robotic mowers, brush cutters, tillers, snow blowers, outboard marine engines, and walking assist devices, as well as portable battery inverter power sources. This segment also offers HondaJet aircraft. The company also sells spare parts; and provides after-sale services through retail dealers directly, as well as through overseas operations, independent distributors, and licensees. Honda Motor Co., Ltd. sells its products through independent retail dealers. Honda Motor Co., Ltd. was founded in 1946 and is headquartered in Tokyo, Japan.

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