Contrasting NIO (NYSE:NIO) & Mercedes-Benz Group (OTCMKTS:MBGYY)

Mercedes-Benz Group (OTCMKTS:MBGYY) and NIO (NYSE:NIO) are both auto/tires/trucks companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, dividends, institutional ownership, risk, earnings, profitability and analyst recommendations.

Volatility and Risk

Mercedes-Benz Group has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, NIO has a beta of 1.74, meaning that its stock price is 74% more volatile than the S&P 500.

Earnings and Valuation

This table compares Mercedes-Benz Group and NIO”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mercedes-Benz Group	$157.56 billion	0.32	$15.43 billion	C$2.76	4.78
NIO	$65.73 billion	0.11	-$2.94 billion	($1.53)	-2.26

Mercedes-Benz Group has higher revenue and earnings than NIO. NIO is trading at a lower price-to-earnings ratio than Mercedes-Benz Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for Mercedes-Benz Group and NIO, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercedes-Benz Group	0	5	0	0	2.00
NIO	1	8	1	1	2.18

NIO has a consensus price target of $5.17, suggesting a potential upside of 49.54%. Given NIO’s stronger consensus rating and higher probable upside, analysts plainly believe NIO is more favorable than Mercedes-Benz Group.

Profitability

This table compares Mercedes-Benz Group and NIO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mercedes-Benz Group	6.99%	10.90%	3.84%
NIO	-33.41%	-113.83%	-19.82%

Institutional & Insider Ownership

48.5% of NIO shares are owned by institutional investors. 1.0% of NIO shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Mercedes-Benz Group beats NIO on 8 of the 15 factors compared between the two stocks.

About Mercedes-Benz Group

Mercedes-Benz Group AG operates as an automotive company in Germany and internationally. It operates through Mercedes-Benz Cars, Mercedes-Benz Vans, and Mercedes-Benz Mobility segments. The company develops, manufactures, and sells cars and vans under the Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach, G-Class brands, as well as related spare parts and accessories. It also provides financing, leasing, car subscription and rental, fleet management, insurance brokerage, and mobility services, as well as digital services for charging and payment. The company was formerly known as Daimler AG and changed its name to Mercedes-Benz Group AG in February 2022. Mercedes-Benz Group AG was founded in 1886 and is headquartered in Stuttgart, Germany.

About NIO

NIO Inc. designs, manufactures, and sells electric vehicles in the People's Republic of China. The company is also involved in the manufacture of e-powertrain, battery packs, and components; and racing management, technology development, and sales and after-sales management activities. In addition, it offers power solutions for battery charging needs; and other value-added services. The company was formerly known as NextEV Inc. and changed its name to NIO Inc. in July 2017. NIO Inc. was founded in 2014 and is headquartered in Shanghai, the People's Republic of China.