REE Automotive (NASDAQ:REE – Get Free Report) and Goodyear Tire & Rubber (NASDAQ:GT – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.
Risk & Volatility
REE Automotive has a beta of 2.4, meaning that its stock price is 140% more volatile than the S&P 500. Comparatively, Goodyear Tire & Rubber has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500.
Profitability
This table compares REE Automotive and Goodyear Tire & Rubber’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| REE Automotive | N/A | N/A | N/A |
| Goodyear Tire & Rubber | -14.37% | -2.95% | -0.50% |
Analyst Ratings
This is a summary of recent ratings and recommmendations for REE Automotive and Goodyear Tire & Rubber, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| REE Automotive | 1 | 0 | 0 | 0 | 1.00 |
| Goodyear Tire & Rubber | 2 | 3 | 2 | 0 | 2.00 |
Goodyear Tire & Rubber has a consensus price target of $8.06, indicating a potential upside of 87.88%. Given Goodyear Tire & Rubber’s stronger consensus rating and higher possible upside, analysts clearly believe Goodyear Tire & Rubber is more favorable than REE Automotive.
Valuation & Earnings
This table compares REE Automotive and Goodyear Tire & Rubber”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| REE Automotive | $1.30 million | 1.87 | -$55.81 million | ($5.28) | -0.01 |
| Goodyear Tire & Rubber | $18.28 billion | 0.07 | -$1.72 billion | ($8.83) | -0.49 |
REE Automotive has higher earnings, but lower revenue than Goodyear Tire & Rubber. Goodyear Tire & Rubber is trading at a lower price-to-earnings ratio than REE Automotive, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
12.7% of REE Automotive shares are owned by institutional investors. Comparatively, 84.2% of Goodyear Tire & Rubber shares are owned by institutional investors. 0.5% of Goodyear Tire & Rubber shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Summary
REE Automotive beats Goodyear Tire & Rubber on 8 of the 14 factors compared between the two stocks.
About REE Automotive
REE Automotive Ltd. operates as an automotive technology company in France, the United Kingdom, the United States, and internationally. The company offers REEcorner, a compact module that integrates critical vehicle drive components comprising as steering, braking, suspension, powertrain, and control between the chassis and the wheel; and REEplatform that allows for the addition of a modular and customizable top hat/cabin design based on customer specifications, without requiring modification to the platform. It also provides P7-S Strip Chassis for commercial delivery vehicles and walk-in vans; P7-C Chassis Cab and Cutway Chassis, a class 4 chassis cab fully electric commercial truck for delivery and a range of vocational applications; and P7-B Box Truck, a class 3 box truck built on a P7 cab chassis with its all-wheel drive and all-wheel steer for vehicle control for better handling and safety in adverse conditions. It serves original equipment manufacturer, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, mobility-as-a-service providers, and autonomous drive companies. The company is headquartered in Herzliya, Israel.
About Goodyear Tire & Rubber
Goodyear Tire & Rubber Co. engages in the development, manufacture, distribution, and sale of tires. It operates through the following geographical segments: Americas, Europe, Middle East, and Africa, and Asia Pacific. The Americas segment is involved in the development, manufacture, distribution, and sale of tires and related products and services in North, Central, and South America. The Europe, Middle East, and Africa segment focuses on the development, manufacture, distribution, and sale of tires for automobiles, trucks, buses, aircraft, motorcycles, earthmoving, mining, and industrial equipment throughout Europe, the Middle East, and Africa. The Asia Pacific segment refers to the development, manufacture, distribution, and sales of tires for automobiles, trucks, buses, aircraft, farm, earthmoving, mining, and industrial equipment throughout the Asia Pacific region. The company was founded by Frank A. Seiberling on August 29, 1898 and is headquartered in Akron, OH.
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