Analyzing BYD (OTCMKTS:BYDDF) and Honda Motor (NYSE:HMC)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BYD	5.71%	22.70%	5.86%
Honda Motor	2.95%	5.03%	2.10%

Risk & Volatility

BYD has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500. Comparatively, Honda Motor has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Insider and Institutional Ownership

5.3% of Honda Motor shares are held by institutional investors. 0.0% of Honda Motor shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for BYD and Honda Motor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BYD	0	0	1	0	3.00
Honda Motor	0	6	0	0	2.00

BYD presently has a consensus target price of $85.00, suggesting a potential upside of 589.80%. Given BYD’s stronger consensus rating and higher possible upside, equities research analysts clearly believe BYD is more favorable than Honda Motor.

Valuation and Earnings

This table compares BYD and Honda Motor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BYD	$108.10 billion	N/A	$5.60 billion	$0.71	17.36
Honda Motor	$142.43 billion	0.34	$5.52 billion	$2.89	10.64

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

Summary

BYD beats Honda Motor on 8 of the 13 factors compared between the two stocks.

About BYD

BYD Company Limited, together with its subsidiaries, engages in automobiles and batteries business in the People's Republic of China, Hong Kong, Macau, Taiwan, and internationally. The company operates in two segments: Mobile Handset Components, Assembly Service and Other Products; and Automobiles and Related Products and Other Products. The Mobile Handset Components, Assembly Service and Other Products segment manufactures and sells mobile handset components, such as housings and electronic components; and offers assembly services. The Automobiles and Related Products and Other Products segment is involved in the manufacturing and sale of automobiles, and auto-related molds and components; rail transport and related business; and provision of automobile leasing and after sales services, automobile power batteries, lithium-ion batteries, photovoltaic, and iron battery products. The company develops urban rail transportation business. BYD Company Limited was founded in 1995 and is headquartered in Shenzhen, China.

About Honda Motor

Honda Motor Co., Ltd. develops, manufactures, and distributes motorcycles, automobiles, power, and other products in Japan, North America, Europe, Asia, and internationally. It operates through four segments: Motorcycle Business, Automobile Business, Financial Services Business, and Power Product and Other Businesses. The Motorcycle Business segment produces motorcycles, including sports, business, and commuter models; and various off-road vehicles, such as all-terrain vehicles and side-by-sides. The Automobile Business segment offers passenger cars, light trucks, and mini vehicles. The Financial Services Business segment provides various financial services, including retail lending and leasing services to customers, as well as wholesale financing services to dealers. The Power Product and Other Businesses manufactures and sells power products, such as general purpose engines, lawn mowers, generators, water pumps, brush cutters, tillers, outboard marine engines, and snow throwers. 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 independent distributors and licensees. Honda Motor Co., Ltd. was founded in 1946 and is headquartered in Tokyo, Japan.