NIO (NYSE:NIO) & General Motors (NYSE:GM) Critical Contrast

General Motors (NYSE:GM) and NIO (NYSE:NIO) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Profitability

This table compares General Motors and NIO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
General Motors	2.12%	19.36%	4.37%
NIO	-3.95%	-111.37%	-3.62%

Analyst Ratings

This is a summary of current recommendations and price targets for General Motors and NIO, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
General Motors	1	4	22	1	2.82
NIO	2	7	6	0	2.27

General Motors presently has a consensus target price of $101.44, suggesting a potential upside of 17.63%. NIO has a consensus target price of $5.78, suggesting a potential upside of 70.18%. Given NIO’s higher probable upside, analysts plainly believe NIO is more favorable than General Motors.

Earnings and Valuation

This table compares General Motors and NIO”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
General Motors	$185.02 billion	0.39	$2.70 billion	$4.36	19.78
NIO	$12.51 billion	0.67	-$2.14 billion	($0.27)	-12.57

General Motors has higher revenue and earnings than NIO. NIO is trading at a lower price-to-earnings ratio than General Motors, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

92.7% of General Motors shares are owned by institutional investors. Comparatively, 48.5% of NIO shares are owned by institutional investors. 0.4% of General Motors shares are owned by insiders. Comparatively, 1.0% of NIO shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

General Motors has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, NIO has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Summary

General Motors beats NIO on 11 of the 14 factors compared between the two stocks.

About General Motors

General Motors Company designs, builds, and sells trucks, crossovers, cars, and automobile parts; and provide software-enabled services and subscriptions worldwide. The company operates through GM North America, GM International, Cruise, and GM Financial segments. It markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Baojun, and Wuling brand names. In addition, the company sells trucks, crossovers, cars, and automobile parts through retail dealers, and distributors and dealers, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. Further, it offers range of after-sale services through dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories, and extended service warranties. Additionally, the company provides automotive financing; and software-enabled services and subscriptions. General Motors Company was founded in 1908 and is headquartered in Detroit, Michigan.

About NIO

NIO Inc. designs, manufactures, and sells electric vehicles in the People's Republic of China. The company is also involved in the manufacture of e-powertrain, battery packs, and components; and racing management, technology development, and sales and after-sales management activities. In addition, it offers power solutions for battery charging needs; and other value-added services. The company was formerly known as NextEV Inc. and changed its name to NIO Inc. in July 2017. NIO Inc. was founded in 2014 and is headquartered in Shanghai, the People's Republic of China.