General Motors Company (GM), Ford Motor Company (F): U.S. Auto Industry Continues to Rebound

Ford Motor Company (NYSE:F) shares have also seen a notable price advance in recent months. However, with a price to earnings ratio of around 12, a renewed brand image, and industry leading sales results, it looks better positioned to continue a rebound than GM. Moreover, the company just doubled its dividend, a sign that management believes the company is getting back on track. Investors looking for a U.S. auto play should take a look.

Way, Way Too Expansive

Of course the biggest story in the auto industry lately has been Tesla Motors Inc (NASDAQ:TSLA). The company makes only electric cars. After building an expensive showcase racer, it has begun to sell vehicles that people would actually drive on a regular basis. With price tags closing in on $100,000, the cars aren’t cheap, but enough customers have bought them that the start-up finally turned a profit in the first quarter.

The shares are up around 250% so far this year based on that single fact even though the company still faces big headwinds. For example, it had to scrap a lower-cost model due to lack of demand. And it’s planning to build recharge stations across the country to ensure that there’s an infrastructure to support its vehicles. That’s an expensive proposition that could easily push the company back into the red, but one that it has no choice but to undertake since no one else is lining up to do it.

Equally concerning, Tesla Motors Inc (NASDAQ:TSLA) recently stopped reporting its sales backlog. That leaves very little clarity to future sales for a new company selling new technology. Even if Tesla Motors Inc (NASDAQ:TSLA) puts up a couple of solid quarters, it’s hard to justify the share price advance. Investors should stay away.

A Rebound In U.S. Autos

The U.S. auto industry is a shell of its former self. Ford appears to be the best positioned U.S. automaker right now from an investment standpoint. While GM and Tesla Motors Inc (NASDAQ:TSLA) are both doing well, their shares have moved too far too fast based on their underlying businesses. Investors should steer clear.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Ford, General Motors, and Tesla Motors (NASDAQ:TSLA) . The Motley Fool owns shares of Ford and Tesla Motors . Reuben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article U.S. Auto Industry Continues to Rebound originally appeared on Fool.com is written by Reuben Brewer.

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