Financial Survey: Great Wall Motor (OTCMKTS:GWLLF) and Honda Motor (NYSE:HMC)

Great Wall Motor (OTCMKTS:GWLLF) and Honda Motor (NYSE:HMC) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Dividends

Great Wall Motor pays an annual dividend of $0.83 per share and has a dividend yield of 75.2%. Honda Motor pays an annual dividend of $1.00 per share and has a dividend yield of 3.3%. Great Wall Motor pays out 31.2% of its earnings in the form of a dividend. Honda Motor pays out -52.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Recommendations

This is a summary of recent ratings for Great Wall Motor and Honda Motor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Great Wall Motor	0	0	0	0	0.00
Honda Motor	2	2	0	1	2.00

Honda Motor has a consensus target price of $25.00, suggesting a potential downside of 17.04%. Given Honda Motor’s stronger consensus rating and higher possible upside, analysts plainly believe Honda Motor is more favorable than Great Wall Motor.

Earnings & Valuation

This table compares Great Wall Motor and Honda Motor”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Great Wall Motor	N/A	N/A	N/A	$2.66	0.42
Honda Motor	$144.79 billion	0.32	-$2.80 billion	($1.91)	-15.78

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Great Wall Motor	N/A	N/A	N/A
Honda Motor	-1.75%	-3.07%	-1.18%

Insider & Institutional Ownership

10.8% of Great Wall Motor shares are owned by institutional investors. Comparatively, 5.3% of Honda Motor shares are owned by institutional investors. 0.0% of Honda Motor shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Great Wall Motor beats Honda Motor on 7 of the 13 factors compared between the two stocks.

About Great Wall Motor

Great Wall Motor Company Limited researches and develops, manufactures, and sells automobiles, and automotive parts and components in China, Europe, ASEAN countries, Latin America, the Middle East, Australia, South Africa, and internationally. The company offers SUVs, sedans, pick-up trucks, multi-purpose vehicles, and energy vehicles primarily under the Haval, WEY, ORA, Tank, and Great Wall Pickup brand names. It also provides investment and financing, logistics and goods transportation, buildings rental, after-sales, customer sales, technical development and consulting, technical, and finance leasing services; consulting services on automotive research and development; and operates investment platform. In addition, the company repairs automobiles; transports general goods; researches, develops, and manufactures auto moulds; researches and develops unmanned vehicles; researches and manufactures motorcycles and related parts; and automotive technology research and development, and technical consultancy services, as well as processes, recycles, and sells waste and used materials; and sells lubricants. Further, it engages in the wholesale and retail of car accessories; research and test development of engineering technology; international trading activities; scrap car recycling and dismantling activities; and provision of insurance brokering, technical, and computer system services, as well as development of network and information security software. The company was formerly known as Baoding Great Wall Motor Company Limited and changed its name to Great Wall Motor Company Limited in May 2003. The company was founded in 1984 and is headquartered in Baoding, China. Great Wall Motor Company Limited is a subsidiary of Baoding Innovation Great Wall Asset Management Company Limited.

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.