Head to Head Review: NIO (NYSE:NIO) & General Motors (NYSE:GM)

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

Institutional & Insider Ownership

92.7% of General Motors shares are held by institutional investors. Comparatively, 48.5% of NIO shares are held by institutional investors. 0.4% of General Motors shares are held by company insiders. Comparatively, 1.0% of NIO shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

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%

Risk & Volatility

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.

Analyst Recommendations

This is a breakdown of recent ratings for General Motors and NIO, as provided by MarketBeat.

	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, indicating a potential upside of 16.96%. NIO has a consensus target price of $5.78, indicating a potential upside of 94.21%. Given NIO’s higher possible upside, analysts clearly believe NIO is more favorable than General Motors.

Valuation & Earnings

This table compares General Motors and NIO”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
General Motors	$185.02 billion	0.40	$2.70 billion	$4.36	19.89
NIO	$12.51 billion	0.59	-$2.14 billion	($0.27)	-11.02

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.

Summary

General Motors beats NIO on 12 of the 15 factors compared between the two stocks.

About General Motors

General Motors Company designs, manufactures and sells cars, trucks, crossovers and sport utility vehicles. Its vehicle brands include Chevrolet, Buick, GMC and Cadillac, and its offerings also include vehicle parts, software and related services. GM Financial provides automotive financing and leasing products to customers and dealers. Founded in 1908, General Motors is headquartered in Detroit, Michigan. The company serves customers in North America and international markets, with operations and sales spanning multiple regions.

About NIO

NIO Inc. is a China-based electric vehicle company founded in 2014. The company designs, develops, and sells premium smart electric vehicles, including sedans and sport utility vehicles, primarily under the NIO brand. Alongside its vehicles, NIO offers battery-swapping and charging services, vehicle software and connectivity features, and related ownership services. Its battery-as-a-service offering allows customers to separate battery use from vehicle purchase. NIO serves customers in China and selected European markets.