The auto industry is comprised of companies that manufacture passenger and commercial vehicles, such as Ford Motor Co. (F) and General Motors Co. (GM). There are also newer companies, such as Tesla Inc. (TSLA), which only makes electric vehicles. Aside from those that make cars, trucks, and other vehicles, there are companies that supply parts to these companies.
Car stocks, as represented by the First Trust Nasdaq Global Auto ETF (CARZ), have dramatically outperformed the broader market in the past 12 months. CARZ posted a 55.3% total return in the last 12 months compared to the 34.8% return of the Russell 1000. These performance figures and all figures in the tables below are as of Sept. 3, 2021.
Here are the top 3 car stocks with the best value, the fastest earnings growth, and the most momentum.
These are the car stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Car Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Porsche Automobil Holding SE (POAHY)||10.35||31.7||4.9|
|General Motors Co. (GM)||48.82||70.9||5.7|
|Honda Motor Co. Ltd. (HMC)||30.82||53.2||5.9|
- Porsche Automobil Holding SE: Porsche Automobil is a Germany-based holding company whose subsidiaries specialize in the manufacturing of cars, SUVs, and sedans. The company owns a majority stake in Volkswagen AG (VOW3), through which it manages a dozen motor brands.
- General Motors Co.: General Motors is a global automobile manufacturer that makes and sells sedans, SUVs, light trucks, and other vehicles. It also manufactures and sells automotive parts. The company said last week that it was idling production at two of its factories that produce pickup trucks due to the global semiconductor shortage. The shortage has affected production for most global automakers since the start of 2021.
- Honda Motor Co. Ltd.: Honda is a Japan-based global automaker. The company designs and manufactures cars, light trucks, and motorcycles. It also produces power products, such as generators and farm machinery, and operates a financial credit business. Honda recently announced that its U.S. vehicle sales for August 2021 were down 15.6% compared to the previous month. The company said that demand for vehicles was strong, but that challenges in the parts supply chain had a negative impact on sales for the month.
These are the top car stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general.
|Fastest Growing Car Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Ferrari NV (RACE)||218.78||54.2||2,940||98.3|
|Electrameccanica Vehicles Corp. Ltd. (SOLO)||3.48||0.4||N/A (see company description)||2,380|
|Workhorse Group Inc. (WKHS)||9.00||1.1||N/A (see company description)||1,210|
- Ferrari NV: Ferrari is an Italy-based designer and manufacturer of sports cars. The company also produces limited series cars and offers financing through Ferrari Financial Services. Ferrari announced in early June the appointment of Benedetto Vigna to the role of chief executive officer (CEO), effective Sept. 1, 2021. At the time of the announcement, Vigna was president of the Analog, MEMS and Sensors Group of STMicroelectronics NV (STM), a Switzerland-based manufacturer of semiconductors and electronics components.
- Electrameccanica Vehicles Corp. Ltd.: Electrameccanica Vehicles is a Canada-based manufacturer of electric vehicles and high-end, custom-built vehicles. The company reported negative EPS in the most recent quarter, which is why an EPS growth rate could not be calculated for the above table.
- Workhorse Group Inc.: Workhorse Group designs and builds all-electric delivery trucks and aircraft. It also develops cloud-based telematics performance monitoring systems. The company announced in late July the appointment of Richard F. Dauch as CEO, effective Aug. 2, 2021. Dauch, previously CEO of Delphi Technologies, succeeds Duane Hughes. Workhorse Group's EPS was negative in the most recent quarter, which is why an EPS growth rate could not be calculated for the above table.
These are the car stocks that had the highest total return over the last 12 months.
|Car Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|BYD Co. Ltd. (BYDDY)||65.60||93.9||211.5|
|Stellantis NV (STLA)||20.28||63.5||117.0|
|NIO Inc. (NIO)||40.37||66.2||115.9|
|First Trust Nasdaq Global Auto ETF (CARZ)||N/A||N/A||55.3|
- BYD Co. Ltd.: BYD is a China-based manufacturer of automobiles and related products. It makes passenger cars, commercial vehicles, related automotive products, and other transportation equipment. It also makes batteries.
- Stellantis NV: Stellantis, formerly known as Fiat Chrysler Automobiles NV, is a Netherlands-based automobile manufacturer and mobility provider. The company produces passenger and luxury cars, pickup trucks, SUVs, and light commercial vehicles. Stellantis recently announced that it has agreed to acquire F1 Holdings Corp. for $285 million. F1 is the parent company of First Investors Financial Services Group, a U.S.-based automotive finance company. Stellantis expects the acquisition to bolster its sales finance strategy in the U.S. The transaction is expected to close by the end of 2021.
- NIO Inc.: NIO is a China-based developer and manufacturer of smart and connected electric vehicles. Its vehicles are equipped with autonomous driving technology and artificial intelligence (AI) features. The company also produces rechargeable batteries, photovoltaic products, and mobile phones.
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
YCharts. "Financial Data." Accessed Sept. 7, 2021.
Wall Street Journal. "Ford and GM Scale Back Production Amid Chip Shortage." Accessed Sept. 8, 2021.
Honda Motor Co. Ltd. "Light Trucks Provide Bright Spots as American Honda August Sales Dampened by Supply Issues." Accessed Sept. 8, 2021.
Ferrari NV. "Ferrari appoints Benedetto Vigna as Chief Executive Officer." Accessed Sept. 8, 2021.
Electrameccanica Vehicles Corp. "Form 6-K for the month of August 2021," Page 35. Accessed Sept. 8, 2021.
Workhorse Group Inc. "Workhorse Appoints Richard F. Dauch as Chief Executive Officer." Accessed Sept. 8, 2021.
Workhorse Group Inc. "Form 10-Q for the quarterly period ended June 30, 2021," Page 2. Accessed Sept. 8, 2021.
Stellantis NV. "Stellantis to Acquire First Investors Financial Services Group as Key Step to Developing a Captive Financial Services Business in U.S. Market." Accessed Sept. 8, 2021.