Ford (F) and General Motors (GM) aren’t firing on all cylinders, but their latest earnings revealed strong underlying businesses and — in the case of GM — surprising resilience. But that doesn’t mean Ford and GM stock are equal as investments.
It’s no secret that new vehicles sales are strong. Years of pent-up demand have finally been unleashed, bringing sales back to pre-recession levels. Indeed, June vehicle sales topped 17 million, nearly twice the number of vehicles sold during the depths of the downturn five years ago.
Happily for anyone holding Ford or GM stock, rising sales aren’t entirely attributable to car buyers finally trading in their old vehicles. Indeed, Ford and GM are benefitting from canny investments made in their own products. It’s hard to remember a time when U.S. car markers offered such a wide range of high-quality vehicles.
That’s not to say Ford and GM are without problems (cough, recall). As we said above, neither automaker is firing on all cylinders. Ford and GM stock have carved out different paths this year to reflect their different risk profiles and prospects. Both Ford and GM’s businesses are doing pretty well, but if you had to pick just one stock? Here’s look at some of the pros and cons of Ford and GM stock: