Fiat Chrysler Beats Ford – Forbes

Posted: Monday, September 18, 2017

Photographer: Alessia Pierdomenico/Bloomberg

Fiat Chrysler Automobiles N.V. is beating Ford Motor Company, on Wall Street. Fiat Chrysler’s shares have gained 143.70% for the last twelve months and 355.07 percent for the last five years, compared -10.85% and 7.93 % for Ford.

Fiat Chrysler’s Shares Beat Ford’s

*it doesn’t include dividends.

Source: 9/8/17

That may come as a surprise to Ford’s F-150s truck fans, who a couple of years ago had to wait to buy one. And also to Wall Street investors who have been patiently waiting for a turnaround in the company’s shares.

How did Fiat Chrysler do it?

To begin with, Fiat Chrysler is more efficient and less indebted than Ford. In the most recent quarter, the company had a Return on Assets ratio of 3.70 and Debt to Equity ratio of 95.45 compared to 0.80 and 452 of Ford—see first table. That can explain how the two companies have roughly the same operating margins, though Ford is a larger company in terms of sales—see second table.

Source: 9/8/17

Source: 9/8/17

Ford’s heavy debt burden should be of great concern for Wall Street, particularly as it could become worse if there’s an interest spike and the world economy slows down, depressing auto sales.

Then there’s Fiat Chrysler’s broad portfolio of fast-selling SUVs and sporty premium marques such as Alfa Romeo and Maserati–monthly sales of Alfa Romeos and Jeeps have roughly doubled since 2014.


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