Critical Analysis: Dongfeng Motor Group (OTCMKTS:DNFGY) and Toyota Motor (NYSE:TM)

Dongfeng Motor Group (OTCMKTS:DNFGY) and Toyota Motor (NYSE:TM) 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, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Analyst Recommendations

This is a breakdown of recent ratings for Dongfeng Motor Group and Toyota Motor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dongfeng Motor Group	0	0	0	1	4.00
Toyota Motor	0	4	2	2	2.75

Toyota Motor has a consensus target price of $290.00, indicating a potential upside of 68.87%. Given Toyota Motor’s higher possible upside, analysts plainly believe Toyota Motor is more favorable than Dongfeng Motor Group.

Insider & Institutional Ownership

1.5% of Toyota Motor shares are held 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.

Risk and Volatility

Dongfeng Motor Group has a beta of -0.1, suggesting that its share price is 110% less volatile than the S&P 500. Comparatively, Toyota Motor has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500.

Earnings and Valuation

This table compares Dongfeng Motor Group and Toyota Motor”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dongfeng Motor Group	$14.77 billion	0.65	$8.07 million	N/A	N/A
Toyota Motor	$50,684.95 billion	0.00	$25.40 billion	$19.58	8.77

Toyota Motor has higher revenue and earnings than Dongfeng Motor Group.

Dividends

Dongfeng Motor Group pays an annual dividend of $0.26 per share and has a dividend yield of 0.4%. Toyota Motor pays an annual dividend of $5.60 per share and has a dividend yield of 3.3%. Toyota Motor pays out 28.6% of its earnings in the form of a dividend.

Profitability

This table compares Dongfeng Motor Group and Toyota Motor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dongfeng Motor Group	N/A	N/A	N/A
Toyota Motor	7.59%	9.74%	3.82%

Summary

Toyota Motor beats Dongfeng Motor Group on 11 of the 14 factors compared between the two stocks.

About Dongfeng Motor Group

Dongfeng Motor Group Company Limited engages in the research, development, manufacture, and sale of commercial and passenger vehicles, engines, and other auto parts in the People's Republic of China. It operates in four segments: Commercial Vehicles, Passenger Vehicles, Financing Service, and Corporate and Others. The company's commercial vehicles include light, medium, and heavy-duty trucks, as well as pickup trucks and buses; passenger vehicles comprise sedans, MPVs, and SUVs; electric and new energy vehicles, and special commercial vehicles; and other automobile related products, as well as automotive parts and components, and automobile equipment. It also provides investment and advisory, car maintenance and repair, insurance agency, automotive technology development and system integration, and logistics, as well as financing and loan services. In addition, it is involved in trading of used car. The company is based in Wuhan, the People's Republic of China. Dongfeng Motor Group Company Limited operates as a subsidiary of Dongfeng Motor Corporation.

About Toyota Motor

Toyota Motor Corporation designs, manufactures, assembles, and sells passenger vehicles, minivans and commercial vehicles, and related parts and accessories in Japan, North America, Europe, Asia, Central and South America, Oceania, Africa, and the Middle East. It operates in Automotive, Financial Services, and All Other segments. The company offers subcompact and compact cars; mini-vehicles; mid-size, luxury, sports, and specialty cars; recreational and sport-utility vehicles; pickup trucks; minivans; trucks; and buses. It offers vehicles under the Toyota and Lexus brand names. Further, the company provides financial services, such as retail financing and leasing, wholesale financing, insurance, and credit cards. Additionally, it operates GAZOO.com, a web portal for automobile information, as well as engages in telecommunications and other businesses. The company was founded in 1933 and is headquartered in Toyota, Japan.