Comparing General Motors (NYSE:GM) and Mercedes-Benz Group (OTCMKTS:MBGYY)

Mercedes-Benz Group (OTCMKTS:MBGYY) and General Motors (NYSE:GM) are both large-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Profitability

This table compares Mercedes-Benz Group and General Motors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mercedes-Benz Group	3.89%	5.41%	1.97%
General Motors	1.05%	18.18%	4.17%

Risk & Volatility

Mercedes-Benz Group has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, General Motors has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.

Dividends

Mercedes-Benz Group pays an annual dividend of C$0.69 per share and has a dividend yield of 6.2%. General Motors pays an annual dividend of $0.72 per share and has a dividend yield of 0.9%. Mercedes-Benz Group pays out 44.5% of its earnings in the form of a dividend. General Motors pays out 36.4% 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. General Motors has increased its dividend for 3 consecutive years.

Institutional & Insider Ownership

92.7% of General Motors shares are owned by institutional investors. 0.4% of General Motors shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Mercedes-Benz Group and General Motors”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mercedes-Benz Group	$149.55 billion	0.29	$5.82 billion	C$1.55	7.14
General Motors	$185.02 billion	0.39	$2.70 billion	$1.98	41.81

Mercedes-Benz Group has higher earnings, but lower revenue than General Motors. Mercedes-Benz Group is trading at a lower price-to-earnings ratio than General Motors, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Mercedes-Benz Group and General Motors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercedes-Benz Group	0	2	0	4	3.33
General Motors	1	4	17	1	2.78

General Motors has a consensus price target of $102.30, suggesting a potential upside of 23.58%. Given General Motors’ higher probable upside, analysts clearly believe General Motors is more favorable than Mercedes-Benz Group.

Summary

General Motors beats Mercedes-Benz Group on 13 of the 18 factors compared between the two stocks.

About Mercedes-Benz Group

Mercedes-Benz Group AG operates as an automotive company in Germany and internationally. It operates through Mercedes-Benz Cars, Mercedes-Benz Vans, and Mercedes-Benz Mobility segments. The company develops, manufactures, and sells cars and vans under the Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach, G-Class brands, as well as related spare parts and accessories. It also provides financing, leasing, car subscription and rental, fleet management, insurance brokerage, and mobility services, as well as digital services for charging and payment. The company was formerly known as Daimler AG and changed its name to Mercedes-Benz Group AG in February 2022. Mercedes-Benz Group AG was founded in 1886 and is headquartered in Stuttgart, Germany.

About General Motors

General Motors Company designs, builds, and sells trucks, crossovers, cars, and automobile parts; and provide software-enabled services and subscriptions worldwide. The company operates through GM North America, GM International, Cruise, and GM Financial segments. It markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Baojun, and Wuling brand names. In addition, the company sells trucks, crossovers, cars, and automobile parts through retail dealers, and distributors and dealers, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. Further, it offers range of after-sale services through dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories, and extended service warranties. Additionally, the company provides automotive financing; and software-enabled services and subscriptions. General Motors Company was founded in 1908 and is headquartered in Detroit, Michigan.