Which of the following two companies would you invest in?

When you are looking to invest in a publicly listed company, what factors do you consider before making your investment?

Do you consider the company’s:

  • Market capitalisation
  • Price-earnings ratio
  • Net profit
  • Earnings per share
  • Revenue growth
  • Profit growth
  • Dividends paid by the company
  • Market share
  • Future viability of the company’s product 
  • Financial projections

Well, based on your criteria, which of the two following companies would you invest in? (data from 31st August 2020)

Share priceUS$447US$133
Company worthUS$206 billionUS$203 billion
Motor vehicles sold$368,000$9,000,000
Revenue$21 billion$253 billion
Gross Profit Margin21%17%
P/E ratio1,28613
Revenue Growth48%1%
DebtUS$13 billionUS$90 billion
CashUS$8.5 billionUS$54 billion
Vehicle/employee924
Company’s name TeslaToyota
(data from 31st August 2020)
Source:  MacroTrends.net

So which share would you buy?

Tesla’s story is a lot more appealing than Toyota’s, but would you invest in Tesla rather than Toyota?  

Should you have any questions with regard to investing in the share market, please submit an online enquiry now or call Peter Quinn on +61 2 9580 9166.  We also offer a FREE 45-minute consultation should you have other financial planning, taxation or superannuation issues you may wish to discuss.

The information in this document does not take into account your personal objectives, financial situation or needs, and so you should consider its appropriateness having regard to these factors before acting on it.  It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.     

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