Contrasting Mercedes-Benz Group (OTCMKTS:MBGYY) & Subaru (OTCMKTS:FUJHY)

Subaru (OTCMKTS:FUJHY) and Mercedes-Benz Group (OTCMKTS:MBGYY) are both large-cap auto/tires/trucks companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, risk, valuation, institutional ownership and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Subaru and Mercedes-Benz Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Subaru	1	0	0	0	1.00
Mercedes-Benz Group	0	5	0	0	2.00

Volatility and Risk

Subaru has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, Mercedes-Benz Group has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Earnings and Valuation

This table compares Subaru and Mercedes-Benz Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Subaru	$32.58 billion	0.41	$2.66 billion	$1.80	5.07
Mercedes-Benz Group	$157.56 billion	0.35	$15.43 billion	C$3.81	3.78

Mercedes-Benz Group has higher revenue and earnings than Subaru. Mercedes-Benz Group is trading at a lower price-to-earnings ratio than Subaru, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

0.0% of Subaru shares are held by institutional investors. 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.

Dividends

Subaru pays an annual dividend of $0.19 per share and has a dividend yield of 2.1%. Mercedes-Benz Group pays an annual dividend of C$0.83 per share and has a dividend yield of 5.8%. Subaru pays out 10.6% of its earnings in the form of a dividend. Mercedes-Benz Group pays out 21.8% 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.

Profitability

This table compares Subaru and Mercedes-Benz Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Subaru	8.50%	15.26%	8.18%
Mercedes-Benz Group	6.99%	10.90%	3.84%

Summary

Mercedes-Benz Group beats Subaru on 7 of the 13 factors compared between the two stocks.

About Subaru

Subaru Corporation manufactures and sells automobiles and aerospace products in Japan, rest of Asia, North America, Europe, and internationally. It operates through three segments: Automotive, Aerospace, and Others. The company manufactures, sells, and repairs passenger cars and their components, aircrafts, aerospace-related machinery, and related components; and rents and manages real estate properties. It is also involved in the shipping, land freight, and warehousing of vehicles; leasing and rental of vehicles; credit and financing of vehicles; inspection, service, and maintenance of aircrafts; and IT system development and operation services. The company was formerly known as Fuji Heavy Industries Ltd. and changed its name to Subaru Corporation in April 2017. The company was founded in 1917 and is headquartered in Tokyo, Japan.

About Mercedes-Benz Group

Mercedes-Benz Group AG operates as an automotive company in Germany and internationally. It operates through Mercedes-Benz Cars, Mercedes-Benz Vans, and Mercedes-Benz Mobility segments. The company develops, manufactures, and sells cars and vans under the Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach, G-Class brands, as well as related spare parts and accessories. It also provides financing, leasing, car subscription and rental, fleet management, insurance brokerage, and mobility services, as well as digital services for charging and payment. The company was formerly known as Daimler AG and changed its name to Mercedes-Benz Group AG in February 2022. Mercedes-Benz Group AG was founded in 1886 and is headquartered in Stuttgart, Germany.