Honda Motor (NYSE:HMC) & Brilliance China Automotive (NYSE:BCAUY) Head-To-Head Analysis

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Honda Motor (NYSE:HMC) and Brilliance China Automotive (OTCMKTS:BCAUY) are both auto/tires/trucks companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Volatility and Risk

Honda Motor has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Brilliance China Automotive has a beta of 2.23, meaning that its stock price is 123% more volatile than the S&P 500.

Institutional and Insider Ownership

2.3% of Honda Motor 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.

Analyst Recommendations

This is a summary of current ratings for Honda Motor and Brilliance China Automotive, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Honda Motor 0 1 2 0 2.67
Brilliance China Automotive 0 0 0 0 N/A

Profitability

This table compares Honda Motor and Brilliance China Automotive’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Honda Motor 3.38% 6.26% 2.66%
Brilliance China Automotive N/A N/A N/A

Earnings & Valuation

This table compares Honda Motor and Brilliance China Automotive’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Honda Motor $143.35 billion 0.32 $5.49 billion $3.12 8.44
Brilliance China Automotive $661.40 million 8.19 $879.54 million $1.74 6.17

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

Dividends

Honda Motor pays an annual dividend of $0.84 per share and has a dividend yield of 3.2%. Brilliance China Automotive pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. Honda Motor pays out 26.9% of its earnings in the form of a dividend. Brilliance China Automotive pays out 6.9% 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. Honda Motor has raised its dividend for 5 consecutive years. Honda Motor is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Honda Motor beats Brilliance China Automotive on 11 of the 14 factors compared between the two stocks.

About Honda Motor

Honda Motor Co., Ltd. develops, manufactures, and distributes motorcycles, automobiles, power products, and other products worldwide. The company operates through four segments: Motorcycle Business, Automobile Business, Financial Services Business, and Power Product and Other Businesses. The Motorcycle Business segment produces sports models, including trial and moto-cross racing vehicles; business and commuter models; all-terrain vehicles; and side-by-side models. The Automobile Business segment offers passenger cars, light trucks, and mini vehicles, as well as vehicles powered with alternative fuel, such as ethanol, battery electric, and fuel cell vehicles. The Financial Services Business segment provides various financial services, including retail lending and leasing services to customers, as well as other financial services comprising wholesale financing to dealers. The Power Product and Other Businesses segment manufactures and sells various power products consisting of general-purpose engines, generators, water pumps, lawn mowers, riding mowers, robotic mowers, brush cutters, tillers, snow blowers, outboard marine engines, and walking assist devices, as well as portable battery inverter power sources. 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 overseas operations, independent distributors, and licensees. Honda Motor Co., Ltd. sells its products through independent retail dealers. Honda Motor Co., Ltd. was founded in 1946 and is headquartered in Tokyo, Japan.

About Brilliance China Automotive

Brilliance China Automotive Holdings Limited, an investment holding company, manufactures and sells minibuses and automotive components in the People's Republic of China. The company offers its minibuses under the JinBei and Granse brands, as well as multi-purpose vehicles under the Huasong brand. Its automotive components include mouldings, seats, axles, safety and airbag systems, interior decoration products, and engines for minibuses, sedans, sport utility vehicles, light duty trucks, etc. The company also offers sport activity vehicles. Brilliance China Automotive Holdings Limited has strategic partnerships and alliances with BMW, Toyota, Magna, Bosch, Continental, Delphi, TI Automotive, and Johnson Controls. The company was founded in 1949 and is headquartered in Central, Hong Kong, and is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange.

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