Better Industrial Stock: Ford vs. Ferrari
Key Points
Ford dominates the market for pickup trucks and SUVs, but its shares are cheap for a reason.
Ferrari’s financial profile doesn’t resemble a typical car company, a nod to its incredible brand power.
The best stock to own has what it takes to generate a higher return over the next five years.
- 10 stocks we like better than Ferrari ›
This year hasn't been the best for Ford (NYSE: F) and Ferrari (NYSE: RACE). The Detroit auto stock has seen its share price tank 10% (as of March 18) in 2026. The Italian brand is in the same lane, as its shares are down 11%.
Shares in both businesses are currently trading well below their peak prices, so this should prompt opportunistic investors to take a closer look under the hood. Is Ford or Ferrari the better industrial stock to buy right now?
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Ford's leading position in trucks and SUVs doesn't mask its unfavorable fundamentals
Ford's F-Series pickups were once again the best-selling vehicles in America in 2025. This continued an incredible streak, now at 44 years, that they've held this position. Ford is a leader in the market for SUVs, as well. This is a good position to be in, since trucks and SUVs carry higher price tags and better margins.
However, this hasn't translated to a strong financial performance -- at least over the long term. Because Ford is a mass market auto manufacturer, its growth and profits are usually disappointing, compared to companies in other sectors.
For example, Ford's revenue is projected to increase at a compound annual rate of less than 1.8% over the next three years, according to analysts' consensus estimates. Also, its adjusted operating margin came in at 3.6% in 2025.
Without strong growth and profit gains, Ford doesn't have what it takes to generate winning returns for investors. That's true even though the stock's valuation is cheap, as it trades at a forward price-to-earnings ratio (P/E) of 8.1. Over the past decade, the shares have produced a disappointing total return of 50%.
Ferrari's superb financial performance is worth the premium price tag
During the last decade, Ferrari shares have climbed 674%, and right now, the luxury stock trades at a forward P/E of 29.6. That premium valuation might actually present an attractive entry point for prospective investors.
That's because Ferrari isn't a typical car company and caters to the wealthiest buyers. Therefore, demand is significantly less cyclical than the rest of the industry. Management doesn't try to sell as many vehicles as possible, focusing instead on scarcity and supporting the brand's value. This leads to incredible pricing power.
The financials reflect Ferrari's strategic priorities. Revenue increased 7% in 2025, despite shifting trade policies presenting a notable headwind. And in the past five years, the company's operating margin has averaged an unbelievable 27%.
Ferrari is clearly winning the race against Ford. It's an outstanding business due to its brand, pricing power, steady growth, and impressive profits.
Over the next five years and beyond, the Italian supercar company is poised to generate a higher return for shareholders. It's the better stock to buy over Ford.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ferrari. The Motley Fool has a disclosure policy.
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