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The 10 Most Valuable Auto Companies in the World

By U.S. News & World Report

These are the biggest names in the auto industry.

Tesla Inc (ticker: TSLA) stock achieved another milestone recently, briefly surpassing German luxury automaker BMW in market capitalization on June 9 as it continues its climb as one of the world’s most valuable auto manufacturers in the world. Tesla is unique among most auto peers in that the majority of its market valuation comes from future projections rather than current production. Here’s a look at the 10 biggest auto companies, according to current stock prices.

10. Renault: $28.4 billion

French auto company Renault has shares listed on the European Euronext market. The Renault Clio IV, Captur and Megane IV were among the top-selling models in France in 2017. Despite a 2.7 percent increase in revenue and a 112.5 percent increase in net income in the past three years, Renault’s market cap has dropped 3.3 percent in that time. Renault is looking to the future by collaborating with Nissan to “develop a comprehensive, modular transportation system to enable clients to book rides and mobility operators to monitor and operate self-driving car fleets.”

9. Nissan: $40.8 billion

The price-earnings multiple contraction that has impacted the rest of the traditional auto industry in recent years has hit Nissan as well. The company’s market cap has drifted lower by 2.7 percent in the past three years despite a 40 percent rise in revenue and a 56 percent rise in net income. In addition to the driverless car partnership with Renault, Nissan is looking to the future with its Leaf electric car. The Leaf was released back in 2011 and is the best-selling electric vehicle of all-time, with more than 250,000 models sold as of January 2017, according to Motor Trend.

8. Ford Motor Co. (F): $44.9 billion

Ford has been one of the pillars of the Detroit-based U.S. auto industry since its inception more than a century ago. However, Ford’s net income declined by 35 percent in the first quarter of 2017 and is down 67.3 percent in the past three years. Despite 4.5 percent revenue growth in that same period, Ford’s market cap has declined 34.3 percent. New CEO Jim Hackett is leading a turnaround effort that includes bringing a fully driverless car to market by 2021. At a forward P/E of only 6.8, Ford could be a value play for investors if the turnaround effort succeeds.

7. Honda Motor Co. (HMC): $50 billion

Japan’s Honda is known for popular models such as Civic, Accord and CRV. Despite selling a record 4.7 million automobiles in 2016, according to Statista, Honda’s market cap has declined by 20.3 percent in the past three years. Perhaps investors are concerned that the company will be late to the game in adapting to the changing auto industry. Last year, BI Intelligence projected more than 20 million driverless cars will be on the road by 2020, but Honda is targeting 2025 for the launch of its first driverless model.

6. General Motors Co. (GM): $52.2 billion

Earlier this year, Tesla passed General Motors in market cap, ending GM’s long reign as the largest U.S. auto company. GM’s fully-electric Chevrolet Bolt EV was named the 2017 Motor Trend Car of the Year and is the Model 3’s biggest competition in the affordable, long-range electric vehicle market at this point. Yet despite the positive performance of the Bolt EV, investors remain skeptical of GM’s long-term prospects. Net income is up 210 percent in the past three years, but GM’s market cap has shrunk 12 percent in that time.

5. Tesla: $57.6 billion

Tesla is expected ship its first Model 3 this summer. Tesla produced a total of just 83,922 vehicles in all of 2016, suggesting the company has a lot to prove to justify its valuation. Tesla reported -$622 million in free cash flow in the first quarter of 2017 as it continues to invest heavily in building up its production infrastructure. Tesla bulls cheer CEO Elon Musk’s innovative vision for transforming the auto industry. However, earlier this year, hedge fund manager David Einhorn said investors are “hypnotized” by Musk, and UBS analyst Colin Langan said Tesla’s stock is “disconnected from fundamentals.”

4. BMW: $61.8 billion

German auto giant BMW is one of the most successful luxury car producers in the world. In 2016, BMW reported record global sales of 2 million automobiles, up 5.2 percent from 2015. However, BMW stock is suffering from a familiar trend among legacy automakers. The company’s market cap is down 25.7 percent in the past three years. BMW got off to a strong start in the electric car era with the launch of hybrid i3 and i8 models in 2013 and 2014. Since that time, BMW has been “falling behind in electrics,” Union Investment fund manager Ingo Speich said earlier this year.

3. Volkswagen: $76.7 billion

German automaker Volkswagen produced 6 million automobiles in 2016, but its key growth metrics are heading in the wrong direction. Revenue is down 8.7 percent in the past three years, while net income has plummeted 46.4 percent. In that same time, the company’s market cap has dropped 37.5 percent. Volkswagen’s reputation also took a big hit in 2015 when the U.S. Environmental Protection Agency revealed the company had been cheating on emissions tests since 2008. In March, CEO Matthias Muller admitted that while he would “love to tell the investors they should indeed stay calm … the Volkswagen brand is struggling to find its way in the future.”

2. Daimler: $79 billion

Daimler, owner of the luxury Mercedes-Benz brand, is the largest German automaker, selling roughly 3 million vehicles worldwide last year. Like all of the other legacy automakers, Daimler’s market cap is trending in the wrong direction, down 23.7 percent in the past three years. Tesla may have brought the concept of driverless car technology into the main-stream consciousness, but Daimler’s 2014 Mercedes-Benz S-Class sedan will always hold the distinction of being the first car to feature hands-off driving capabilities. Daimler has also been investing heavily in battery-electric drivetrains, investments shareholders hope will pay off in the coming decades.

1. Toyota Motor Corp. $174.2 billion

With a market cap of more than $157 billion, Japan’s Toyota Motor Corp. (TM) is the largest auto company in the world, nearly three times the size of Tesla. Toyota is not immune to the overall weakness in legacy auto stocks, as its market cap is down 13.9 percent in the past three years. The Prius is the top-selling hybrid model in history, with more than 6 million units sold as of the end of 2016. However, Toyota has fallen behind market leaders in electric car technology. In November, the company appointed its CEO Akio Toyoda to lead its newly-formed electric car division.

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The 10 Most Valuable Auto Companies in the World originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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