Toyota Motor Corporation (ADR) (TM), Tesla Motors Inc (TSLA): Why You Should Buy Toyota Not Tesla

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Ford Motor Company (NYSE:F) is planning to sell a natural gas versions of its F-Series trucks later this year. The truck is intended to appeal to corporate fleets rather than consumers, but it could be a sign of things to come.

The price of natural gas has plunged in recent years as fracking technology has created an energy boom in the U.S. The rise of fracking has been enough to scare Saudi Prince Alwaleed, who recently warned that his country’s economy is in danger.

Ultimately, Ford Motor Company (NYSE:F)’s efforts to push natural gas trucks might not go anywhere. Battery technology, combined with fast charging stations, could prove to be the better long-term solution for passenger vehicles.

Nevertheless, the rise of natural gas-powered vehicles is a trend that Tesla Motors Inc (NASDAQ:TSLA) shareholders should keep their eyes on.

Investing in auto stocks

The auto sector is hot. With the average car on the road still a decade old, auto companies could be poised to reward shareholders for quite some time. But when it comes to auto stocks, investors are probably better off with the more boring Toyota Motor Corporation (ADR) (NYSE:TM), rather than the upstart Tesla Motors Inc (NASDAQ:TSLA).

To the chagrin of American rivals like Ford Motor Company (NYSE:F), the falling yen has benefited Toyota Motor Corporation (ADR) (NYSE:TM), which is trading with a reasonably low forward price-to-earnings ratio of 11. Tesla Motors Inc (NASDAQ:TSLA)’s forward PE is 137, and the stock has surged because of a short squeeze.

Joe Kurtz owns Tesla Motors Put options. The Motley Fool recommends Ford and Tesla Motors . The Motley Fool owns shares of Ford and Tesla Motors .

The article Why You Should Buy Toyota, and Not Tesla originally appeared on Fool.com.

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