Tesla Vs. Honda: Which Auto Manufacturer Is A Better Buy?

POWR Ratings

HMC has an overall A rating, which equates to a Strong Buy in our proprietary POWR Ratings system. However, TSLA has an overall rating of C, which translates to Neutral. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

In terms of Value Grade, HMC has an A, which is in sync with its lower-than-industry ev/sales ratio. In comparison, TSLA has a Value Grade of F. Both HMC and TSLA have a Momentum Grade of B, consistent with their price returns over the past year. HMC has a Sentiment Grade of B, in sync with analysts’ expectations that earnings and revenue will increase. In comparison, TSLA has a grade of D for Sentiment.

Of the 51 stocks in the B-rated Auto & Vehicle Manufacturers group, HMC is ranked #1, while TSLA is ranked #35. Beyond what I stated above, our POWR Ratings system also rates both HMC and TSLA for Growth, Stability, and Quality. Get all HMC’s ratings here. Also, click here to see the additional POWR Ratings for TSLA.

The Winner

While both TSLA and HMC are good long-term investments considering their market dominance and increased volumes of production, HMC appears to be a better buy based on the factors we've discussed. We think HMC’s lower relative valuation and higher profitability should help the stock perform better in the long run.

Our research shows that the odds of success increase if one bets on stocks with an Overall POWR Rating of Buy or Strong Buy. If you’re looking for other top-rated stocks in the Auto & Vehicle Manufacturers group, click here.

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