Quick snapshot
Comparing headline metrics highlights a clear gap: General Motors (GM) reports $14.4 billion in free cash flow versus Ford Motor (F) at $7.3 billion, a forward price-to-earnings ratio of 6.5x against Ford’s 7.6x, and a gross margin 3 percentage points wider. Ford’s dividend yield of 4.2% stands out on paper but is paired with a FY2025 net loss of -$8.18 billion, underscoring the risk behind the payout.
Head-to-head numbers
Key market and profitability measures are stark. At the time of this comparison, GM’s share price is $86.75 with a market capitalization of $76.93 billion, while Ford trades at $14.06 and a market capitalization of $57.54 billion. On valuation and profitability metrics, GM posts a forward P/E of 6.5x and EV/EBITDA of 10.8x versus Ford’s 7.6x and 25.5x respectively. Gross margins stand at 10.2% for GM and 7.1% for Ford; last twelve months net margins are 1.1% for GM and -3.9% for Ford.
Other differentials include return on equity of 2.9% for GM versus -18.3% for Ford, debt-to-equity ratios of 207.7% versus 450.6%, and trailing free cash flow of $14.4 billion for GM against $7.3 billion for Ford. Dividend yields are 0.8% for GM and 4.2% for Ford. Analyst target upside is higher for GM (+15.2%) than Ford (+8.6%). InvestingPro fair-value estimates imply roughly -23% downside for both names—GM’s fair value listed at $66.20 versus the $86.75 market price, and Ford’s at $10.84 versus $14.06. One-year returns show GM up 67.7% and Ford up 38.3%.
Recent trajectory: GM
GM’s near-term performance has momentum. The company reported a Q2 2026 earnings-per-share beat of $3.57 versus a $3.18 consensus and raised its full-year guidance for adjusted EBIT to a range of $14.0–$16.0 billion and adjusted EPS to $12.00–$14.00. Adjusted automotive free cash flow more than doubled year-over-year to $5.0 billion in Q2 alone. The company also recorded $10.9 billion in EV-related restructuring charges since the second half of 2025; management states that more than 60% of the cash impact from those charges has been absorbed, which management views as clearing the way for improved cash generation.
Areas of concern: Ford
Ford’s FY2025 net loss of -$8.18 billion and a deeply negative ROE of -18.3% suggest sustained operational strain rather than a single-period anomaly. Market multiples highlight this divergence: Ford’s EV/EBITDA of 25.5x is more than twice GM’s multiple, implying either elevated market expectations for a turnaround or a different risk assessment. Ford also carries a heavy debt load, with a debt-to-equity ratio of 450.6%, which reduces financial flexibility in an environment with tariffs and cost pressures. Additional contextual items cited include revenue momentum reaching $187.27 billion and the Geely plant agreement intended to lower European fixed costs.
Bull and bear considerations
Arguments in favor of GM center on operational strength: guidance raises, meaningful free cash flow generation, an upcoming in-vehicle AI technology launch in 2026, a potential U.S. Army tactical truck contract, and robust internal-combustion-engine and truck demand. Bear cases for GM note a $2.5–3.5 billion tariff cost headwind already accounted for, continuing EV-related charges, and the point that a forward P/E of 6.5x only appears attractive if management’s guidance is achieved.
For Ford, proponents cite the higher dividend yield, revenue momentum to $187.27 billion, and the Geely plant deal that aims to reduce fixed costs in Europe. Detractors point to Ford’s negative net income, rising leverage, an EV/EBITDA multiple that looks expensive relative to peers, and that at least one broker (TD Cowen) remains cautious with a Hold view and a $15 target.
Competitive outlook and valuation wrinkle
Ford CEO Jim Farley has publicly warned that Chinese automakers could enter the U.S. market within five to ten years, introducing a long-term competitive uncertainty. Meanwhile, fair-value estimates cited in the comparison put both stocks around 23% below current market prices, indicating that recent share-price gains—especially GM’s one-year 67.7% rise—have already reflected much of the positive developments.
Conclusion
On fundamental metrics, recent operational results and near-term earnings visibility, GM currently presents the stronger case. Ford’s chief attraction is its higher dividend yield, but that yield is paired with a FY2025 loss of -$8.18 billion and a heavily negative ROE, which warrants a cautious stance. The fair-value comparisons shown imply both names may be trading above their calculated intrinsic values, suggesting investors might consider patience or a phased approach to entry in either stock.
Note: Historical data references and analyst views cited in this article are limited to the information provided in the comparison above.