Tesla vs. Ford: Both Posted Earnings Beats, but Which Is the Better Investment?

Is Tesla the one to invest in despite its ups and downs?
  • Tesla smashed analyst expectations and gained big in after-hours trading.
  • Ford had another big down day, bringing its year-to-date losses to over 30 percent.
  • Ford is making more money, but Tesla is growing much faster.

Tesla’s (TSLA) Q3 earnings surprised analysts when it reported its first quarterly profit in two years — earning $2.90 a share on $6.82 billion in revenue against average analyst expectations of a loss of $0.15 a share on $6.32 billion in revenue after market close on Wednesday, Oct. 24. The news prompted a 9.14 percent gain on Thursday.

Meanwhile, big-three automaker Ford (F) saw shares plunge 4.77 percent the day before posting its own earnings beat at the same time. Ford reported earnings of $0.29 per share on $34.7 billion in revenue against expectations of $0.28 per share on revenue of $33.3 billion, prompting its own Thursday rally of almost 10 percent.

So, is Tesla’s big quarter a sign it really is the car company of the future, or does investing in a more traditional automaker like Ford make more sense?

Tesla vs. Ford Stock Comparison

Here’s a basic comparison of Tesla stock and Ford stock:

Share Price$314.86$8.99
Market Cap$53.7 billion$35.8 billion
2017 Revenue$11.8 billion$156.8 billion
2017 Profits-$2 billion$7.6 billion
2017 Revenue Growth68%3.3%
2017 Profit GrowthN/A65.4%
GOBankingRates’ Evaluation$3.6 billion$144 billion
P/E RatioN/A5.32
P/S Ratio3.930.23
Stock Gain/Loss Last Month4.61%-2.56%
Stock Gain/Loss Last Year-3.37%-26.36%
All market data accurate as of market close on Oct. 25, 2018.

Why You Might Pick Tesla Stock:

  • Tesla continues to post impressive revenue growth, adding nearly two-thirds to its 2016 total last year and more than tripling the $3.2 billion in sales it posted in 2014.
  • Production of the Model 3 hit 4,300 a week in Q3, pointing toward the potential for the company finally fixing production issues.
  • Cash on hand increased by over $700 million to almost $3 billion this quarter, potentially reducing the need to raise more funds.

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Why You Might Pick Ford Stock:

  • Ford’s dividend yield of 7.33 percent is excellent, providing a clear income potential that Tesla cannot.
  • From a value perspective, there’s no question as Ford would appear to be a very cheap stock with a PE ratio of 5.32 and PS ratio of 0.23 compared to a PS ratio of 3.93 for Tesla and no PE ratio (you need earnings for that).
  • Although nearly $3 billion of cash on hand might be good news for Tesla, Ford is sitting on over $25 billion in cash reserves.

Related: 7 Companies That Have Reinvested in America Following Trump’s Election

The Final Word on Tesla vs. Ford

Clearly, Tesla is the hot stock at the moment with the skyrocketing revenues to show for it, but Ford provides a clear value-buy with a great dividend.

Click through to read about the 5 best investments if you want off the Tesla roller coaster.

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This article is produced for informational purposes only and is not a recommendation to buy or sell any securities. Investing comes with risk to loss of principal. Please always conduct your own research and consider your investment decisions carefully.

The author is long Ford.