So, I’m going to be moving into one of the Japanese car-makers. The question is which one. Many of their fundamentals are similar. The biggest discrepancy is simply Toyota’s market capitalization. I had no idea it was that large. But Honda might have a more diverse product line-up, being as they’re into motorcycles, boat engines and lawnmowers as well.
Honda (NYSE: HMC)
| Market Capitalization |
$60.7B |
 |
| Revenue (FYR) |
$113.2B |
|
| EPS |
$3.12 |
|
| P/E Ratio |
10.7x |
|
| Shares Outstanding |
1.8 B |
|
| Avg. Daily Share Volume (Last 10 Days) |
1.6 M |
|
| Dividend Yield |
2.40% |
Honda’s got a much better “price,” i.e., share price than Toyota (which we know isn’t the best way to measure the “price” of a company’s stock, but still. It does indicate the amount of my own money that I must dispense with in order to buy the stock). And it’s PE suggests that it might be valued higher due to quicker growth or more projected growth than Toyota.
Toyota (NYSE: TM)
| Market Capitalization |
$142.5B |
|
| Revenue (FYR) |
$247.9B |
|
| EPS |
$10.19 |
|
| P/E Ratio |
8.9x |
|
| Shares Outstanding |
1.6 B |
|
| Avg. Daily Share Volume (Last 10 Days) |
725.2 K |
|
| Dividend Yield |
3.13% |
As you can see, Toyota’s got much more of the market than Honda. But Toyota doesn’t have as diverse a product line-up. They do specialize in some interesting-looking “personal mobility vehicles,” though. You can find these if you go to their site and look up under their “concept vehicles.”
As for “goodwill” and company intangibles, Toyota and Honda are also similar-feeling to me. Honda ranks a bit higher on reliability and trustworthiness and creativity, though. And, of course, the Honda Civic is the top-selling (and top-stolen) car in Canada, for what it’s worth.
The reason I’m getting into one of these companies (and maybe, probably? eventually both) is for foreign diversification; also because they’re truly global companies; and because I think they’re going to weather the oil-crushing, gas-guzzling auto-maker collapse that seems to be upon us with the demise of such companies as GM. Both Honda and Toyota are innovators. And if that Genepax company’s water-running car technology is ever picked up in Japan, you’d think it would be by either Honda or Toyota. What do you think? Do you agree that these two have lasting power?
I think I’m going to go with Honda first, because it looks as though it has more room to grow, and it’s more diversified. But I’d love to hear additional thoughts and perspectives. I won’t be buying much at first. I’ll be diversifying over time and adding at different levels.
