Reviewing Li Auto (NASDAQ:LI) & Suzuki Motor (OTCMKTS:SZKMY)

Suzuki Motor (OTCMKTS:SZKMY) and Li Auto (NASDAQ:LI) are both large-cap auto/tires/trucks companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Profitability

This table compares Suzuki Motor and Li Auto’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Suzuki Motor	6.71%	10.44%	6.47%
Li Auto	3.60%	6.31%	2.87%

Volatility and Risk

Suzuki Motor has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500. Comparatively, Li Auto has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.

Earnings and Valuation

This table compares Suzuki Motor and Li Auto”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Suzuki Motor	$38.25 billion	0.76	$2.75 billion	$5.44	10.95
Li Auto	$19.79 billion	0.91	$1.10 billion	$0.58	29.78

Suzuki Motor has higher revenue and earnings than Li Auto. Suzuki Motor is trading at a lower price-to-earnings ratio than Li Auto, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Suzuki Motor and Li Auto, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Suzuki Motor	0	1	0	1	3.00
Li Auto	4	13	1	2	2.05

Li Auto has a consensus target price of $21.66, indicating a potential upside of 25.44%. Given Li Auto’s higher possible upside, analysts plainly believe Li Auto is more favorable than Suzuki Motor.

Insider & Institutional Ownership

0.0% of Suzuki Motor shares are held by institutional investors. Comparatively, 9.9% of Li Auto shares are held by institutional investors. 48.5% of Li Auto shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Li Auto beats Suzuki Motor on 8 of the 15 factors compared between the two stocks.

About Suzuki Motor

Suzuki Motor Corporation engages in the manufacturing and marketing of automobiles, motorcycles, and marine products in Japan, rest of Asia, Europe, North America, and internationally. It offers mini-vehicles, sub-compact vehicles, standard-sized vehicles, outboard motors, motorized wheelchairs, and electro senior vehicles. The company is also involved in solar power generation and logistics business, as well as provides other services. Suzuki Motor Corporation was founded in 1909 and is headquartered in Hamamatsu, Japan.

About Li Auto

Li Auto Inc. operates in the energy vehicle market in the People's Republic of China. It designs, develops, manufactures, and sells premium smart electric vehicles. The company's product line comprises MPVs and sport utility vehicles. It offers sales and after sales management, and technology development and corporate management services, as well as purchases manufacturing equipment. The company offers its products through online and offline channels. The company was formerly known as Leading Ideal Inc. and changed its name to Li Auto Inc. in July 2020. Li Auto Inc. was founded in 2015 and is headquartered in Beijing, the People's Republic of China.