Both General Motors (NYSE:GM) and Ford (NYSE:F) are trading at remarkably low prices relative to their earnings. In this clip from the Industry Focus podcast, Motley Fool analyst Sean O'Reilly and senior auto specialist John Rosevear talk about which one is a better buy for long-term investors today, based on their valuation and their long-term plans for growth.

A transcript follows the video.

This podcast was recorded on Jun. 16, 2016. 

Sean O'Reilly: John, before we sign off, are you a buyer these days of Ford, GM, any of the automakers?

John Rosevear: I own Ford and GM. Frankly, I own enough Ford and GM. That's not a reflection of what I think of their investment desirability. Both of them are making, if we set aside this disruption factor for a moment -- I know that's a big factor to set aside -- both of them have excellent management teams, good balance sheets, and they're making good moves to boost their profitability over time by building on the turnarounds they've done in the U.S. to improve their operations in places like Europe as well. That's happening. Those profits are going up. Both Ford and GM are going to profitable in Europe this year. That's new. They lost money there for years, because Europe went through a very big recession.

China is going to continue to expand and they're both players there. They're making good margins there. South America is troubled now, but that won't always be true. Both companies have been able to minimize the damage while Brazil works through whatever it has to work through. They're streamlining product portfolios to increase their cost advantage, their ability to take advantage of their economies at scale by streamlining and simplifying what they do under the skin of the cars, the things that aren't visible to customers when you're just riding around and driving. There's more commonality there. That's the way the whole industry is going, but Ford and GM are certainly in the midst of that. They're in the midst of developing future technologies that will keep them competitive as fuel-economy standards tighten and so forth. They're all doing the right things.

GM expects its margins are going to be squeezed on pickups, says it has to go to more fuel efficient things. It's offsetting that by greatly boosting its Cadillac brand, because luxury cars make big profit margins. Cadillac's catching on in China. At some point, they're going to try and go into Europe with Cadillac. The cars are almost good enough to do that, to go compete with the Germans on their home turf. We'll see how that goes. There are a lot of these efforts going on to boost margins. They should unfold over the next six or seven years with, again, setting aside the cycle of the economy and any massive disruption that might happen, relatively steadily over time, we may take a dip in the U.S., but then we'll come back up, and meanwhile, the cycles will run overseas. But if we get back to a situation like this in seven years, Ford and GM should both be considerably more profitable than they are now, absent any disruption.

Meanwhile, you're collecting dividends in the 5% range or close to it on both of these stocks. I think if you're looking for the "moonshot," you're definitely not in the right place. But if you want a company to put away and reinvest the dividends, and see where you are in a decade and expect to have a nice, handsome return that you don't have to lie awake at night worrying about, I think these are both intriguing candidates.

I might lean toward GM right now, just because if you look back to 2008, 2009, Ford has come further already than GM has. GM still has more room to optimize overseas and so forth than Ford does. I won't argue against somebody who says, "I'm going to go buy Ford today." I would say, "Good." It might not outperform for a few years, but if you sleep on it for seven years, you may be very happy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.