Savvy investors often consider car companies leading the way in electric vehicles and new technologies before they look at the best stock to buy right now. Automakers General Motors (GM) and Ford Motor Company (F) have long dominated the U.S. auto industry and are now competing with each other in areas such as electric vehicles (EVs), autonomous driving, and profitability. With the help of key financial markers, this comparison aims to see which company is a better buy right now and for the long term.
Return on Assets (ROA)
Return on Assets (ROA) shows the efficiency of a company using its resources to make a profit. A greater ROA shows that a company uses its assets more wisely.
- GM ROA stands at 2.06%.
- Ford recorded a Rate of Return on Assets of 1.76%.
General Motors has a higher efficiency score for assets, so it uses assets to generate profits more easily than Ford (Yahoo Finance, 2025). For industries that require a large investment in capital, small changes in ROA make a big difference.
Winner: GM
Return on Equity (ROE)
ROE measures the proportion of earnings made from shareholder equity.
- GM ROE is 9.03%.
- Coast to Coast’s ROE: 11.24%
Although Ford has a higher ROE, you have to view it together with its financial leverage. The reason Ford has a higher ROE is mainly because it uses more debt compared to GM to produce the same returns.
Caution is needed since Ford is highly leveraged, but they still come out on top.
Equity Ratio
The ratio shows the percentage of a company’s assets funded by shareholders rather than by debt.
- The GM Equity Ratio stands at 33.12% for 2020.
- The Ford Equity Ratio is currently 22.06%.
GM has a higher equity ratio, indicating that its financial structure is safer and more dependable in unclear economic times (as stated in the Ford Annual Report, 2025). Our article on The 3 Best AI Stocks to Buy Right Now!
The winner is GM.
Gross Margin
Gross Margin reveals what the company earns after all the expenses associated with making goods. It demonstrates the skill of managing costs in manufacturing.
- Government MBS: 12.11%
- The Ford group offers 8.01% of the shares for debt exchange.
It is likely that higher cost efficiency and stronger control of prices at GM come from better management of operations and supply chains, according to its Q1 Report (2025).
The Winner is: GM
Operating Margin
This measure highlights how much profit is left after paying the costs that change with production.
- The GM ratio for this group is 6.58%.
- Ford reported growth of 2.36%.
Ford’s operating margin is just a third of GM’s, thereby confirming that GM handles its operational costs better than Ford.
The Winner is: GM
Net Margin
It is a way to calculate a company’s net profit after every expense and tax.
- GM: The 3-month rolling 1-week value was 3.08%
- Ford: 2.74%
General Motors achieves a better net margin, which underlines its efficient cost control throughout the income statement (Bloomberg, 2025).
The game ended with GM being declared the winner.
Summary Comparison Table
| Metric | GM | Ford | Winner |
| ROA (%) | 2.06 | 1.76 | GM |
| ROE (%) | 9.03 | 11.24 | Ford (due to leverage) |
| Equity Ratio (%) | 33.12 | 22.06 | GM |
| Gross Margin (%) | 12.11 | 8.01 | GM |
| Operating Margin (%) | 6.58 | 2.36 | GM |
| Net Margin (%) | 3.08 | 2.74 | GM |
Valuation and Cash Flow Metrics
To see more clearly how well an investment is doing, look at valuation and cash flow metrics, apart from profit.
- When it comes to Price-to-Earnings (P/E) Ratios, GM is showing a lower value (6.63) than Ford (8.21), which means GM could be an undervalued pick.
- GM’s EV/EBITDA is lower at 8.29 than Ford’s 15.12.
- Assessed through Free Cash Flow to Equity (FCFE), General Motors ($59.5B) produces much more than Ford ($31.3B).
- The free cash flow to the firm (FCFF) at GM is $42.5 billion, while it is $23.1 billion for Ford.
GM is found to generate greater profits and provide a more valuable investment, since its price is lower and it supports innovation, dividends, and share buybacks (CNBC, 2025).
Strategic Positioning
GM is putting significant investment into electric vehicles by using its own Ultium batteries, forming partnerships with Japanese automaker Honda, and focusing on Cruise’s autonomous driving arm. The goal is to sell 1 million EVs by 2026 to match sustainability targets and new changing mindsets in the community.
Even as Ford improves its F-150 Lightning and Mustang Mach-E, the company must cope with rising costs and challenges during its overseas restructuring (Ford Q1 Report, 2025).
Strategic Verdict: GM is likely to perform better than Ford in the future as it focuses on electrification and autonomy so consider as the best stock to buy right now.
Best Stock to Buy Right Now: Final Verdict
Based on a careful examination of both companies, General Motors (GM) is the more promising stock to purchase right now since it outperforms Ford (F) in important ways.
When it comes to profits, GM easily outperforms Ford in most categories: gross margin, operating margin, and net margin, showing that GM spends its money more wisely and ends up with more resources for investment. The margin is important in the automotive sector because there is strong competition, and costs for raw materials often change. GM’s resilience and ability to ask for high margins suggest it can keep strong results when the economy changes (Morningstar, 2025).
GM’s valuation is particularly low, as its P/E ratio is 6.63 and EV/EBITDA is 8.29, compared to Ford’s 8.21 and 15.12, respectively, indicating that it may be a better investment based on earnings and cash flows. To summarize, GM is producing greater profits compared to the investment, something that can point to promising opportunities at this time (CNBC, 2025).
Also, having nearly $60 billion in FCFE and $42.5 billion in FCFF for Free Cash Flow, GM can use its cash flow to drive innovations in EVs, pay back investors via dividends or buybacks, and manage financial losses during economic recessions with very little debt. Instead, because of Ford’s higher debt and fondness for equity, changes in interest rates and other economic developments may harm it more (Yahoo Finance, 2025).
GM is making quicker and more planned progress toward EV manufacturing, better batteries, and future autonomous vehicles. By teaming up (for instance, with Honda and Cruise) and using the same platform, GM can increase its output and economize over the coming years.
While Ford has introduced the F-150 Lightning and Mustang Mach-E in the market, it continues to deal with challenges in Europe and South America, causing profit margins to dip.
Overall, General Motors has stronger finances, better deals, and thinks forward, so it is the best stock to buy right now.
Disclaimer
The content provided herein is for informational purposes only and should not be construed as financial, investment, or other professional advice. It does not constitute a recommendation or an offer to buy or sell any financial instruments. The company accepts no responsibility for any loss or damage incurred as a result of reliance on the information provided. We strongly encourage consulting with a qualified financial advisor before making any investment decisions.
