Toyota Motor (NYSE: TM) and Spartan Motors (NASDAQ:SPAR) are both auto/tires/trucks companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.
Insider and Institutional Ownership
0.8% of Toyota Motor shares are held by institutional investors. Comparatively, 66.4% of Spartan Motors shares are held by institutional investors. 3.7% of Spartan Motors shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Toyota Motor pays an annual dividend of $1.59 per share and has a dividend yield of 1.2%. Spartan Motors pays an annual dividend of $0.10 per share and has a dividend yield of 0.6%. Toyota Motor pays out 14.3% of its earnings in the form of a dividend. Spartan Motors pays out 23.3% 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. Toyota Motor is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Toyota Motor has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Spartan Motors has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.
This table compares Toyota Motor and Spartan Motors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and recommmendations for Toyota Motor and Spartan Motors, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Toyota Motor currently has a consensus price target of $119.11, indicating a potential downside of 7.33%. Spartan Motors has a consensus price target of $20.00, indicating a potential upside of 17.30%. Given Spartan Motors’ stronger consensus rating and higher possible upside, analysts plainly believe Spartan Motors is more favorable than Toyota Motor.
Earnings and Valuation
This table compares Toyota Motor and Spartan Motors’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Toyota Motor||$255.27 billion||0.74||$17.03 billion||$11.09||11.59|
|Spartan Motors||$707.10 million||0.85||$15.93 million||$0.43||39.65|
Toyota Motor has higher revenue and earnings than Spartan Motors. Toyota Motor is trading at a lower price-to-earnings ratio than Spartan Motors, indicating that it is currently the more affordable of the two stocks.
About Toyota Motor
Toyota Motor Corporation (Toyota) conducts business in the automotive industry. The Company also conducts business in finance and other industries. The Company’s segments include Automotive, Financial Services and All Other. Toyota sells its vehicles in approximately 190 countries and regions. Toyota’s markets for its automobiles are Japan, North America, Europe and Asia. The Company’s Automotive segment includes the design, manufacture, assembly and sale of passenger vehicles, minivans and commercial vehicles, such as trucks and related parts and accessories. The Company’s Financial Services segment consists of providing financing to dealers and their customers for the purchase or lease of Toyota vehicles. The All Other segment includes the design, manufacturing and sale of housing, telecommunications and other businesses. Its information technology related businesses include a Web portal for automobile information called GAZOO.com.
About Spartan Motors
Spartan Motors, Inc., through its subsidiaries, engineers, manufactures, and sells heavy-duty and purpose-built specialty vehicles in the United States, Canada, South America, and Asia. It operates through three segments: Fleet Vehicles and Services, Emergency Response Vehicles, and Specialty Chassis and Vehicles. The Fleet Vehicles and Services segment provides walk-in vans, cutaway vans, truck bodies, and parts and accessories for use in e-commerce/last mile/parcel delivery, beverage and grocery delivery, mobile retail, and trades and construction industries under the Aeromaster, Velocity, Ultimate, Trademaster, Metromaster, Utilivan, Spartan Upfit Services, and Reach brands. This segment also installs specialty interior and exterior up-fit equipment for walk-in vans, truck bodies, and passenger vans under Specialty Up-fit name; and distributes related aftermarket parts and accessories. The Emergency Response Vehicles segment provides emergency response cabs and chassis, pumpers, aerial ladder components for fire trucks, rescue equipment, tankers, and parts and accessories under the Spartan, Smeal, Ladder Tower, and UST brands, as well as offers body, aerial, pump, drivetrain, and chassis repair and maintenance services. The Specialty Chassis and Vehicles segment offers motor home chassis; and defense and specialty chassis and vehicles, as well as provides related aftermarket parts and accessories, and maintenance and repair services. This segment also offers assembly services for Isuzu N-gas and F-series chassis. The company sells its products through a network of independent truck dealers, original equipment manufacturers, dealer distributors, leasing companies, and municipalities and other governmental entities, as well as to commercial and individual end users. Spartan Motors, Inc. was founded in 1975 and is headquartered in Charlotte, Michigan.
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