Head to Head Contrast: Daimler (DDAIF) and Honda Motor (HMC)

Daimler (OTCMKTS: DDAIF) and Honda Motor (NYSE:HMC) are both large-cap auto/tires/trucks companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.

Volatility & Risk

Daimler has a beta of 1.63, suggesting that its stock price is 63% more volatile than the S&P 500. Comparatively, Honda Motor has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.

Earnings & Valuation

This table compares Daimler and Honda Motor’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Daimler $185.63 billion 0.37 $10.53 billion $11.12 5.77
Honda Motor $138.71 billion 0.38 $9.53 billion $3.62 8.09

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

Profitability

This table compares Daimler and Honda Motor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Daimler 6.10% 18.76% 4.67%
Honda Motor 6.85% 8.80% 3.67%

Analyst Recommendations

This is a summary of recent ratings for Daimler and Honda Motor, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Daimler 0 1 3 0 2.75
Honda Motor 0 4 4 0 2.50

Honda Motor has a consensus target price of $42.00, suggesting a potential upside of 43.49%. Given Honda Motor’s higher probable upside, analysts clearly believe Honda Motor is more favorable than Daimler.

Institutional and Insider Ownership

0.0% of Daimler shares are owned by institutional investors. Comparatively, 2.0% of Honda Motor shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Honda Motor pays an annual dividend of $0.79 per share and has a dividend yield of 2.7%. Daimler does not pay a dividend. Honda Motor pays out 21.8% of its earnings in the form of a dividend. Honda Motor has increased its dividend for 4 consecutive years.

About Daimler

Daimler AG engages in the production and distribution of cars, trucks, and vans. It operates through the following segments: Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses, and Daimler Financial Services. The Mercedes-Benz Cars segment sells passenger cars and off-road vehicles under the Mercedes-Benz brand and small cars under the smart brand. The Daimler Trucks distributes its trucks under the brand names Mercedes-Benz, Freightliner, FUSO, Western Star, and BharatBenz. The Mercedes-Benz Vans segment manufactures commercial vans such as Sprinter large van, the Vito mid-size van, and the Mecedez-Benz Citan urban delivery van. The Daimler Buses segment trades city and intercity buses, coaches, and bus chassis under the Mercedes-Benz and Setra brands. The Daimler Financial Services segment consists of tailored financing and leasing packages for customers and dealers. It also provides services such as insurance, fleet management, investment products, and credit cards. The company was founded by Gottlieb Daimler and Carl Benz in 1926 and is headquartered in Stuttgart, Germany.

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, leasing, and other financial services comprising wholesale financing to dealers and customers. 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. This segment also offers HondaJet aircraft. The company 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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