2026 Investment Benchmark: Which is More Worth Betting on, General Motors or Ford?

After a strong performance through 2025, the stock prices of traditional automakers (GM) and (F) have far outpaced the broader market, prompting investors to consider whether this upward momentum can continue. GM’s stock soared 65% over the past year to a historical high above $80, while F’s shares increased over 40% to around $14 near the 52-week high. Both companies successfully resisted concerns about slowing electric vehicle growth, delivering surprisingly impressive earnings reports.

Electric Vehicle Battle: GM Leading the Way

The electric vehicle market weakened in Q4 2025 due to the rollback of federal subsidies, but GM’s EV sales hit a new high against the trend. Last year, GM sold 169,887 electric vehicles, up 48% year-over-year, with annual sales reaching 169,887 units—this solidified GM’s position as the second-largest EV manufacturer in the U.S., behind Tesla(TSLA). The Chevy Equinox EV became the best-selling non-Tesla EV model. Notably, even though Q4 EV sales declined to 25,219 units (from 43,982 in the same period in 2024), GM’s total annual sales still grew 5.5% to 2.8 million units.

In contrast, Ford’s EV performance was less impressive. Last year, Ford sold 84,113 EVs, down 14% from 98,000 in 2024, with Q4 plunging 50% to 14,500 units. Although total sales increased 6% to 2.2 million—reaching a new high since 2019—the gap in EV market share has widened. This mainly stems from product line differences: Ford has only launched three EV models—F-150 Lightning, Mustang Mach-E, and E-Transit—while GM offers a broader EV lineup under Chevy, GMC, and Cadillac.

Diverging Financial Outlooks

According to Zacks estimates, GM’s FY2025 EPS(EPS) is expected to decline 2% to $10.33 (from $10.60 in 2024), but rebound 14% in 2026 to $11.81. Notably, over the past 60 days, GM’s EPS estimates for 2025 and 2026 have been raised by 1% and 6%, respectively, indicating growing analyst confidence in its prospects. GM’s annual revenue is projected to exceed $184 billion, remaining stable despite some contraction.

Ford’s financial outlook faces greater challenges. Its 2025 EPS is forecasted at only $1.08, significantly below $1.84 in 2024, mainly due to a $2.5 billion tariff-related loss. The good news is that EPS is expected to rebound to $1.42 in 2026. However, the 2025 EPS forecast has been somewhat weak over the past two months, with a slight downward revision from the previous $1.44 estimate for 2026, despite a small upward adjustment. Ford’s full-year sales are expected to decline slightly less than 0.5% in 2025, and further decrease 2% in 2026 to $168.27 billion.

Capital Return Rate: A Key Difference

An inherent challenge for traditional automakers is that the auto industry is capital-intensive, requiring billions of dollars invested in factories, equipment, and supply chains. GM and Ford are in the long-term investment phase of electrification, which has severely diluted their invested capital(ROIC) before the profit cycle begins. Currently, both companies have low ROICs—GM at 4.6% and Ford at 2.7%—well below the industry average of around 2%, and far from the ideal above 20%.

This means that EV capacity expansion is consuming these companies’ capital returns, posing a long-term investment concern. However, GM’s capital efficiency is notably better than Ford’s, reflecting more rational capacity planning and cost control.

Valuation and Dividend Comparison

Despite concerns over ROIC, the valuation advantages of GM and Ford are significant. Both companies trade at a forward P/E ratio below 11, offering generous dividends and far below the industry average of 14. GM’s valuation is even more attractive—forward P/E of only 7—while Ford’s is around 10. Both have price-to-sales ratios (P/S) below 1, outperforming the industry average of 2.

In terms of dividends, Ford’s annual dividend yield is a high 4.23%, notably higher than GM’s 0.72%. However, looking at growth trends, GM has increased its annual dividends by 20.46% since resuming payouts after the pandemic, while Ford’s growth over the same period is only 8.71%. This suggests GM’s dividend sustainability and growth potential are stronger.

Investment Logic

So far, GM outperforms in several key metrics: higher capital return rate, cheaper valuation multiples, stronger earnings revision trends, and healthier dividend growth trajectory. Although the low ROIC issue is pervasive across the auto industry, GM’s earnings momentum supports its valuation, while Ford remains in a slow recovery phase.

According to Zacks ratings, GM receives a (3持有)Hold#1强烈买入评级(Strong Buy)，反映了其在2026年的增长潜力。相比之下，福特获评# rating, indicating it still needs time to demonstrate sustainable operational efficiency improvements. For long-term investors, both companies are positioned within the broader shift of traditional automakers toward electrification, but the key to future stock price movement will be who can more quickly convert capacity advantages into real profits.