When General Motors (GM -0.91%) reported its huge earnings beat last week -- sales up 56% year over year, profits rising 39%, and a tremendous $4.6 billion in free cash flow (FCF) -- it seemed to set the stage for a similarly good news day from Ford Motor Company (F -3.01%), which would report earnings one day later.

That's not quite how things worked out.

Ford by the numbers

Reporting earnings late on Wednesday, Ford's numbers weren't entirely horrible -- they just weren't anywhere near as good as GM's. Sales of $39.4 billion rose 10% year over year, and Ford generated respectable free cash flow of $3.6 billion.

But in contrast to GM's rising FCF, Ford's FCF number declined 54%. Ford also reported a net loss for the quarter of $827 million -- $0.21 per share. Granted, Ford would have been profitable but for a $2.7 billion noncash impairment charge taken on its investment in autonomous driving company Argo AI, but even backing out that charge, Ford's pro forma profit for the quarter would have been only $0.30 per share -- down 41% year over year.  

Luckily for shareholders, investors were in a forgiving mood last week. Ultimately, Ford stock ended the week 8.8% higher than it began -- not quite as good as GM stock's 11% gain, but not too shabby. The problem is I don't believe Ford deserved to be up at all on these results.

General Motors vs. Ford

Why the contrarian take? Let's drill deeper into the two car companies' relative performance.

First and most obviously, Ford's revenue grew much slower than GM's in the quarter -- 10% growth versus 56%. Second and just as obvious, Ford's profits, both under generally accepted accounting principles (GAAP) and on a pro forma basis, declined whereas GM's profits increased. And granted, Ford's GAAP loss at least owed to its ill-fated investment in Argo AI -- but even without throwing that money in a hole, Ford's adjusted operating profit margin for the quarter would have shrunk markedly, from 8.4% to just 4.6%. GM's operating profit margin, in contrast, gained 1 full percentage point -- and is now nearly double Ford's -- 9.1%, according to data from S&P Global Market Intelligence.

To further illustrate the differences in the companies' relative trajectories, as I pointed out over the weekend, "in almost every market where GM competes, the company expanded its market share," ultimately expanding its global market share by 80 basis points to 7.7%. In contrast, Ford's market share remains stuck in neutral at just 4.9% -- no change from a year ago.    

It wasn't all bad news for Ford

Now, this is not to say that everything about Ford was bad news last week. Notably, the company did generate substantial free cash flow in the quarter. It may not have been quite as much cash as Ford was churning out a year ago, but it's enough that, as Ford pointed out, the company has already -- in just the first nine months of this year -- passed its free cash flow goal for the whole of 2022.

As management reminded us previously, it had set a target of generating FCF of between $5.5 billion and $6.5 billion this year. But in fact, already through the third quarter, the company has generated $6.6 billion.

Factoring this new data into its guidance, Ford says that it now expects to grow its operating profits 15% this year (to $11.5 billion), and end 2022 with somewhere between $9.5 billion and $10 billion in positive free cash flow to boot.

Valuing Ford stock

With a market capitalization of just over $53 billion, Ford stock currently trades for somewhere between 5.3 and 5.6 times its projection for 2022 free cash flow -- depending on where it falls on that range. Granted, Ford has its problems. Relative to GM's performance this past quarter, I think it's clear that Ford is not performing as well as a company as its rival.

That being said, I see a lot to like in Ford stock as a stock. After all, 5.3 times (or 5.6 times) free cash flow is cheap. At current prices, I could see myself buying Ford stock just for the company's 4.5% dividend yield alone. And if Ford can deliver on its promise to grow earnings at 15% through year-end -- and continue that performance beyond 2022 -- this stock really could be a home run investment.

Long story short: Based on performance and price, both GM and Ford stocks look like long-term winners, but Ford is still the better buy.