It May Be Time for Ford Motor Company (F) and General Motors Company (GM)

But, as we’ve mentioned, that actually seems somewhat speculative at this point. Looking at analyst expectations, GM in particular is expected to see high earnings growth over the next several years, resulting in a forward P/E of 6 and a five-year PEG ratio of 0.5. Ford Motor Company (NYSE:F) is making more of a case to income investors at a current dividend yield of 3%. Both are sensitive to the broader economy, of course, with betas in the 1.6 to 1.7 range.

Toyota Motor Corporation (ADR) (NYSE:TM), Honda Motor Co Ltd (ADR) (NYSE:HMC), and India-based Tata Motors Limited (ADR) (NYSE:TTM) are three alternatives in the auto industry. Tata actually trades at a discount to Ford Motor Company (NYSE:F) and GM on a trailing basis, but its financials are expected to come down over the next couple years; as a result it joins Toyota and Honda, which have trailing earnings multiples in the teens, in a range of forward P/Es between 13 and 15.

Certainly Toyota and Honda are more reliable companies (though their recent U.S. sales figures have not been as rosy). Analyst expectations peg each stock’s five-year PEG ratio well below 1, and in absolute terms they may be attractive value stocks, but it is certainly possible that they don’t merit this much of a premium.

We’re skeptical of the value thesis for Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM), but the market is currently setting the bar very low–and certainly much lower than it is for Toyota and Honda. As a result even though we would guess that those two companies will perform better over the next couple years we would suggest that investors consider the two U.S. auto-makers on a value basis.

The article It May Be Time for Ford and GM originally appeared on Fool.com and is written by Jake Mann.

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