Critical Analysis: Tesla (TSLA) and SUBARU Corp/ADR (FUJHY)

SUBARU Corp/ADR (OTCMKTS: FUJHY) and Tesla (NASDAQ:TSLA) are both large-cap auto/tires/trucks companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, valuation and risk.

Risk & Volatility

SUBARU Corp/ADR has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, Tesla has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Dividends

SUBARU Corp/ADR pays an annual dividend of $0.25 per share and has a dividend yield of 1.7%. Tesla does not pay a dividend. SUBARU Corp/ADR pays out 14.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and price targets for SUBARU Corp/ADR and Tesla, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SUBARU Corp/ADR 0 0 0 0 N/A
Tesla 11 10 10 0 1.97

Tesla has a consensus price target of $297.85, indicating a potential downside of 15.86%. Given Tesla’s higher possible upside, analysts clearly believe Tesla is more favorable than SUBARU Corp/ADR.

Profitability

This table compares SUBARU Corp/ADR and Tesla’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SUBARU Corp/ADR 4.64% 16.52% 8.91%
Tesla -18.77% -40.72% -8.34%

Institutional and Insider Ownership

0.2% of SUBARU Corp/ADR shares are held by institutional investors. Comparatively, 60.7% of Tesla shares are held by institutional investors. 22.8% of Tesla shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares SUBARU Corp/ADR and Tesla’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SUBARU Corp/ADR $30.75 billion 0.75 $1.98 billion $1.79 8.40
Tesla $11.76 billion 5.11 -$1.96 billion ($11.48) -30.83

SUBARU Corp/ADR has higher revenue and earnings than Tesla. Tesla is trading at a lower price-to-earnings ratio than SUBARU Corp/ADR, indicating that it is currently the more affordable of the two stocks.

Summary

SUBARU Corp/ADR beats Tesla on 8 of the 15 factors compared between the two stocks.

About SUBARU Corp/ADR

Subaru Corporation manufactures and sells automobiles and related products in Japan and internationally. The company operates through three segments: Automotive, Aerospace, and Other. It manufactures, repairs, and sells passenger cars and their components under the Subaru brand; airplanes, aerospace-related machinery, and their components; and generators, engine-equipped machinery, agricultural machinery, construction machinery, and other machine tools, as well as their components. It also engages in real estate lease, etc. The company was formerly known as Fuji Heavy Industries Ltd. and changed its name to Subaru Corporation on April 1, 2017. Subaru Corporation was founded in 1917 and is headquartered in Tokyo, Japan.

About Tesla

Tesla, Inc. designs, develops, manufactures, and sells electric vehicles, and energy generation and storage systems in the United States, China, Norway, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers sedans and sport utility vehicles. It also provides electric vehicle powertrain components and systems to other manufacturers; and services for electric vehicles through its company-owned service centers, Service Plus locations, and Tesla mobile technicians. This segment sells its products through a network of company-owned stores and galleries. The Energy Generation and Storage segment offers energy storage products, such as rechargeable lithium-ion battery systems for use in homes, commercial facilities, and utility grids; designs, manufactures, installs, maintains, leases, and sells solar energy systems to residential and commercial customers; and sell renewable energy to residential and commercial customers. The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California.

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