Head to Head Analysis: Li Auto (NASDAQ:LI) vs. Mercedes-Benz Group (OTCMKTS:MBGYY)

Li Auto (NASDAQ:LI) and Mercedes-Benz Group (OTCMKTS:MBGYY) are both large-cap auto/tires/trucks companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, earnings, dividends, valuation and profitability.

Earnings & Valuation

This table compares Li Auto and Mercedes-Benz Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Li Auto	$133.72 billion	0.26	$1.65 billion	$1.35	24.39
Mercedes-Benz Group	$157.56 billion	0.39	$15.43 billion	C$2.76	5.72

Mercedes-Benz Group has higher revenue and earnings than Li Auto. Mercedes-Benz Group is trading at a lower price-to-earnings ratio than Li Auto, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

9.9% of Li Auto shares are owned by institutional investors. 48.5% of Li Auto shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Li Auto and Mercedes-Benz Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Li Auto	0	3	3	0	2.50
Mercedes-Benz Group	1	4	0	0	1.80

Li Auto presently has a consensus target price of $32.77, suggesting a potential downside of 0.47%. Given Li Auto’s stronger consensus rating and higher probable upside, analysts clearly believe Li Auto is more favorable than Mercedes-Benz Group.

Risk and Volatility

Li Auto has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, Mercedes-Benz Group has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Profitability

This table compares Li Auto and Mercedes-Benz Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Li Auto	7.20%	13.03%	5.55%
Mercedes-Benz Group	6.99%	10.90%	3.84%

Summary

Li Auto beats Mercedes-Benz Group on 9 of the 14 factors compared between the two stocks.

About Li Auto

Li Auto Inc. operates in the energy vehicle market in the People's Republic of China. It designs, develops, manufactures, and sells premium smart electric vehicles. The company's product line comprises MPVs and sport utility vehicles. It offers sales and after sales management, and technology development and corporate management services, as well as purchases manufacturing equipment. The company offers its products through online and offline channels. The company was formerly known as Leading Ideal Inc. and changed its name to Li Auto Inc. in July 2020. Li Auto Inc. was founded in 2015 and is headquartered in Beijing, the People's Republic of China.

About Mercedes-Benz Group

Mercedes-Benz Group AG operates as an automotive company in Germany and internationally. It operates through Mercedes-Benz Cars, Mercedes-Benz Vans, and Mercedes-Benz Mobility segments. The company develops, manufactures, and sells cars and vans under the Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach, G-Class brands, as well as related spare parts and accessories. It also provides financing, leasing, car subscription and rental, fleet management, insurance brokerage, and mobility services, as well as digital services for charging and payment. The company was formerly known as Daimler AG and changed its name to Mercedes-Benz Group AG in February 2022. Mercedes-Benz Group AG was founded in 1886 and is headquartered in Stuttgart, Germany.