Toyota Motor Corp Ltd Ord (NYSE: TM) and Tata Motors (NYSE:TTM) are both large-cap auto/tires/trucks companies, but which is the better business? We will compare the two companies based on the strength of their dividends, valuation, earnings, analyst recommendations, profitabiliy, institutional ownership and risk.

Institutional & Insider Ownership

0.9% of Toyota Motor Corp Ltd Ord shares are owned by institutional investors. Comparatively, 13.3% of Tata Motors shares are owned 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.

Volatility & Risk

Toyota Motor Corp Ltd Ord has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Tata Motors has a beta of 2.26, suggesting that its share price is 126% more volatile than the S&P 500.

Dividends

Toyota Motor Corp Ltd Ord pays an annual dividend of $3.54 per share and has a dividend yield of 3.1%. Tata Motors does not pay a dividend. Toyota Motor Corp Ltd Ord pays out 31.1% of its earnings in the form of a dividend.

Profitability

This table compares Toyota Motor Corp Ltd Ord and Tata Motors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Toyota Motor Corp Ltd Ord 6.74% 10.40% 3.92%
Tata Motors 2.84% 33.00% 7.70%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Toyota Motor Corp Ltd Ord and Tata Motors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Toyota Motor Corp Ltd Ord 1 4 1 0 2.00
Tata Motors 0 0 3 0 3.00

Toyota Motor Corp Ltd Ord presently has a consensus price target of $112.11, suggesting a potential downside of 1.85%. Tata Motors has a consensus price target of $48.00, suggesting a potential upside of 43.16%. Given Tata Motors’ stronger consensus rating and higher possible upside, analysts plainly believe Tata Motors is more favorable than Toyota Motor Corp Ltd Ord.

Valuation & Earnings

This table compares Toyota Motor Corp Ltd Ord and Tata Motors’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Toyota Motor Corp Ltd Ord $246.55 billion 0.69 $32.21 billion $11.40 10.02
Tata Motors $41.28 billion 0.55 $4.84 billion $1.40 23.95

Toyota Motor Corp Ltd Ord has higher revenue and earnings than Tata Motors. Toyota Motor Corp Ltd Ord is trading at a lower price-to-earnings ratio than Tata Motors, indicating that it is currently the more affordable of the two stocks.

Summary

Tata Motors beats Toyota Motor Corp Ltd Ord on 9 of the 15 factors compared between the two stocks.

Toyota Motor Corp Ltd Ord Company Profile

Toyota Motor Corporation (Toyota) conducts business in the automotive industry. The Company also conducts business in finance and other industries. The Company’s segments include Automotive, Financial Services and All Other. Toyota sells its vehicles in approximately 190 countries and regions. Toyota’s markets for its automobiles are Japan, North America, Europe and Asia. The Company’s Automotive segment includes the design, manufacture, assembly and sale of passenger vehicles, minivans and commercial vehicles, such as trucks and related parts and accessories. The Company’s Financial Services segment consists of providing financing to dealers and their customers for the purchase or lease of Toyota vehicles. The All Other segment includes the design, manufacturing and sale of housing, telecommunications and other businesses. Its information technology related businesses include a Web portal for automobile information called GAZOO.com.

Tata Motors Company Profile

Tata Motors Limited is an automobile company. The Company is engaged in manufacture of motor vehicles. The Company is engaged mainly in the business of automobile products consisting of all types of commercial and passenger vehicles, including financing of the vehicles sold by the Company. The Company’s segments include automotive operations and all other operations. The Company’s automotive segment operations include all activities relating to the development, design, manufacture, assembly and sale of vehicles, including vehicle financing, as well as sale of related parts and accessories. In the automotive segment, the Company manufactures and sells passenger cars, utility vehicles, light commercial vehicles, and medium and heavy commercial vehicles. The Company’s all other operations segment mainly includes information technology (IT) services, and machine tools and factory automation services. The Company operates in over 160 countries across the world.

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