Head to Head Review: Volkswagen (OTCMKTS:VWAGY) versus Lion Electric (NYSE:LEV)

Volkswagen (OTCMKTS:VWAGY – Get Rating) and Lion Electric (NYSE:LEV – Get Rating) are both auto/tires/trucks companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Risk & Volatility

Volkswagen has a beta of 1.53, indicating that its stock price is 53% more volatile than the S&P 500. Comparatively, Lion Electric has a beta of 2.16, indicating that its stock price is 116% more volatile than the S&P 500.

Valuation & Earnings

This table compares Volkswagen and Lion Electric’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Volkswagen	$296.03 billion	N/A	$18.20 billion	$3.57	4.57
Lion Electric	$139.91 million	2.69	$17.78 million	$0.09	21.45

Volkswagen has higher revenue and earnings than Lion Electric. Volkswagen is trading at a lower price-to-earnings ratio than Lion Electric, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

43.7% of Lion Electric shares are owned by institutional investors. 16.6% of Lion Electric shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Volkswagen and Lion Electric’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Volkswagen	6.19%	9.94%	2.98%
Lion Electric	12.70%	-12.59%	-8.24%

Analyst Recommendations

This is a summary of current ratings and target prices for Volkswagen and Lion Electric, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Volkswagen	2	6	4	0	2.17
Lion Electric	1	4	5	0	2.40

Volkswagen presently has a consensus target price of $190.00, suggesting a potential upside of 1,064.22%. Lion Electric has a consensus target price of $5.40, suggesting a potential upside of 179.79%. Given Volkswagen’s higher probable upside, equities analysts clearly believe Volkswagen is more favorable than Lion Electric.

Summary

Lion Electric beats Volkswagen on 7 of the 13 factors compared between the two stocks.

About Volkswagen

(Get Rating)

Volkswagen AG engages in the production and sale of passenger cars and light commercial vehicles. The firm also develops vehicles and components for the brands of the group. It operates through following segments: Passenger Cars and Light Commercial Vehicles, Commercial Vehicles, Power Engineering, and Financial Services. The Passenger Cars and Light Commercial Vehicles segment includes the development of vehicles, engines and vehicle software, the production and sale of passenger cars and light commercial vehicles, and the corresponding genuine parts business. The Commercial Vehicles segment covers the development, production, and sale of trucks, and buses, and the corresponding genuine parts business and related services. The Power Engineering segment deals with the development and production of large-bore diesel engines, turbomachinery, and propulsion components business. The Financial Services segment involves dealer and customer financing, leasing, banking, insurance, and fleet management services. The company was founded on May 28, 1937 and is headquartered in Wolfsburg, Germany.

About Lion Electric

(Get Rating)

The Lion Electric Company designs, develops, manufactures, and distributes purpose-built all-electric medium and heavy-duty urban vehicles in North America. Its products include battery systems, chassis, bus bodies, and truck cabins. The company also distributes truck and bus parts, as well as accessories. The Lion Electric Company was incorporated in 2008 and is based in Saint-Jérôme, Canada.