Ford Motor Company (F)vs General Motors Company (GM)

Quick verdict

Ford Motor Company (F) and General Motors Company (GM) appeal to different investors. On our six-factor framework, F scores 2 and GM scores 4. F looks cheaper on the multiples that matter, while GM grows faster and GM earns higher returns on capital. Overall, GM edges this comparison, but the right pick depends on whether you prioritise value, growth, income or balance-sheet safety.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

Ford Motor Company operates in Auto - Manufacturers (Consumer Cyclical), while General Motors Company sits in Auto - Manufacturers (Consumer Cyclical). Because both compete in the same sector, this is a direct head-to-head and the financial differences below are especially meaningful. F carries a beta of 1.83 versus 1.31 for GM, meaning F has historically been the more volatile of the two.

Valuation

On valuation, F is the cheaper stock. F trades on a forward P/E of 30.96 and EV/EBITDA of -224.14, against 45.86 and 7.4 for GM. Price-to-sales is 0.32 vs 0.44, and free-cash-flow yield is 6.4% vs 0.8%. A higher multiple is only justified if the company can sustain faster growth or wider margins, which is exactly what the next sections test.

Growth profile

GM is the faster grower. F has compounded revenue at 1.2% over three years with EPS growth of -239.2%, while GM has delivered -1.3% revenue and -48.4% EPS growth. Growth like this is the single biggest driver of long-term returns, but it also tends to come with a richer valuation, so it must be weighed against the multiples above.

Profitability and quality

On profitability and quality, GM is stronger. F posts a 2.0% operating margin, -18.9% return on equity and 1.0% return on invested capital. GM posts 1.0%, 3.0% and 0.8% respectively. Return on invested capital above roughly 15% is a hallmark of a durable competitive advantage, so this metric deserves particular attention.

Balance-sheet risk

GM has the safer balance sheet. F carries net-debt/EBITDA of 3.57x with a current ratio of 1.09, versus 2.32x and 1.14 for GM. Lower leverage gives a company more room to invest through a downturn and reduces the risk of dilution or distress.

Price performance and shareholder returns

Over the past year F returned 52.3% against 49.6% for GM; on a three-year annualised basis it is 22.3% vs 43.4%. F yields 3.9% and GM yields 0.7%. Past performance never guarantees future results, but the multi-year track record shows how the market has rewarded each business so far.

Which stock fits which investor

For value-oriented investors, F is the better fit on today's multiples. Growth investors will likely prefer GM, which is expanding faster. Income investors should lean toward F for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour GM for its superior returns on capital. This is a comparison of facts, not a recommendation — your time horizon, risk tolerance and existing holdings should drive the final decision.

• Value: F
• Growth: GM
• Income: F
• Quality: GM

Frequently asked questions

Is F or GM the better buy right now?

Neither is universally "better." F scores 2 and GM scores 4 on our six-factor framework. F is cheaper, GM grows faster, and GM is higher quality — so the right pick depends on your objective.

Which stock is cheaper, F or GM?

F is the cheaper stock across forward P/E (30.96 vs 45.86), EV/EBITDA (-224.14 vs 7.4) and price-to-sales (0.32 vs 0.44).

Which has grown faster, F or GM?

GM has the stronger growth profile, with three-year revenue CAGR of 1.2% for F versus -1.3% for GM.

Which stock pays a bigger dividend?

F yields 3.9% and GM yields 0.7%, so F is the stronger income choice.

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