Accuride (ACW) versus Gentex Corporation (NASDAQ:GNTX) Critical Review

Accuride (NYSE: ACW) and Gentex Corporation (NASDAQ:GNTX) are both cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Accuride and Gentex Corporation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Accuride	0	1	0	0	2.00
Gentex Corporation	0	3	4	0	2.57

Accuride currently has a consensus target price of $2.58, suggesting a potential upside of 0.00%. Gentex Corporation has a consensus target price of $21.50, suggesting a potential upside of 24.21%. Given Gentex Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Gentex Corporation is more favorable than Accuride.

Risk & Volatility

Accuride has a beta of 2.6, meaning that its share price is 160% more volatile than the S&P 500. Comparatively, Gentex Corporation has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500.

Profitability

This table compares Accuride and Gentex Corporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Accuride	-5.89%	-68.57%	-5.28%
Gentex Corporation	21.01%	18.95%	15.79%

Dividends

Gentex Corporation pays an annual dividend of $0.40 per share and has a dividend yield of 2.3%. Accuride does not pay a dividend. Gentex Corporation pays out 31.5% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Accuride and Gentex Corporation’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Accuride	N/A	N/A	N/A	($0.96)	-2.69
Gentex Corporation	$1.75 billion	2.82	$615.67 million	$1.27	13.63

Gentex Corporation has higher revenue and earnings than Accuride. Accuride is trading at a lower price-to-earnings ratio than Gentex Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

46.6% of Accuride shares are owned by institutional investors. Comparatively, 81.5% of Gentex Corporation shares are owned by institutional investors. 2.6% of Accuride shares are owned by company insiders. Comparatively, 2.5% of Gentex Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Gentex Corporation beats Accuride on 10 of the 13 factors compared between the two stocks.

About Accuride

Accuride Corporation is a United States-based manufacturer and supplier of wheels, wheel-end components and other products to the North American commercial vehicle industry. The Company’s products include steel and aluminum commercial vehicle wheels and assemblies, truck body and chassis parts, and gray, ductile and austempered ductile iron castings. The Company’s products are marketed under various brands, such as Accuride Wheel End Solutions (Accuride Wheels and Gunite), Accu-Flange and Gianetti Ruote. The Company uses Steel Armor steel wheel powder coating technology. The Company also offers stud-piloted, tubeless and tube-type forged aluminum wheels, brake drums and disc wheel hubs in commercial vehicles. The Company serves the original equipment manufacturers (OEMs) and their related aftermarket channels. The Company serves the commercial vehicle market, including heavy and medium-duty trucks, commercial trailers, light trucks, buses, and specialty and military vehicles.

About Gentex Corporation

Gentex Corporation designs and manufactures automatic-dimming rearview mirrors and electronics for the automotive industry, dimmable aircraft windows for the aviation industry, and commercial smoke alarms and signaling devices for the fire protection industry. The Company’s business segment involves designing, developing, manufacturing and marketing interior and exterior automatic-dimming automotive rearview mirrors that utilize electrochromic technology to dim in proportion to the amount of headlight glare from trailing vehicle headlamps. Within this business segment, the Company also designs, develops and manufactures various electronics that are features to the interior and exterior automotive rearview mirrors, as well as interior visors, overhead consoles, and other locations in the vehicle. The Company ships its products to all of the automotive producing regions across the world, which it supports with various sales, engineering and distribution locations across the world.