Given the choice between growth juggernaut Tesla Inc. ((NASDAQ:(TSLA))) and value-oriented General Motors Company ((NYSE:GM)), most investors right now would much rather choose the former company over the latter. That said, in this article I’m going to make the argument for owning GM over Tesla, from the perspective of a long-term value investor.
First, GM actually has real earnings. Tesla’s stock price and corresponding valuation is based on the concept of future earnings and the prospects for absolutely insane “never-seen-this-before” kind of growth. GM’s margin of safety and moat via its brand and shift to electric vehicle production makes this a much safer stock.
That said, Tesla’s head-start in the EV market makes it a perennial growth favourite for investors with an appetite for growth. Right now, growth is everything, so GM’s stock has significantly underperformed the market and peers like Tesla. That said, there’s nothing wrong with owning a stock with a nice dividend and plenty of long-term potential, particularly if one is worried about a market crash right now. In such a scenario, holding onto Tesla shares would be terrifying.
Secondly, GM’s growth in the EV market is likely to surprise investors and analysts moving forward. The company has begun to invest heavily in its EV technologies and production lines, and this will be a bullish long-term growth driver as it is with Tesla. GM’s brand and ability to market pickups will be a big deal, particularly if GM can win the race to have the best pickup in the market right now.
Invest wisely, my friends.