Critical Survey: Delphi Automotive PLC (DLPH) & Stoneridge (SRI)

Delphi Automotive PLC (NYSE: DLPH) and Stoneridge (NYSE:SRI) are both auto/tires/trucks companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Profitability

This table compares Delphi Automotive PLC and Stoneridge’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Delphi Automotive PLC	7.51%	60.14%	14.35%
Stoneridge	10.12%	22.52%	9.17%

Dividends

Delphi Automotive PLC pays an annual dividend of $1.16 per share and has a dividend yield of 1.2%. Stoneridge does not pay a dividend. Delphi Automotive PLC pays out 24.6% of its earnings in the form of a dividend.

Risk and Volatility

Delphi Automotive PLC has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, Stoneridge has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Delphi Automotive PLC and Stoneridge, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Delphi Automotive PLC	2	2	14	0	2.67
Stoneridge	0	1	1	0	2.50

Delphi Automotive PLC presently has a consensus price target of $95.06, indicating a potential upside of 2.31%. Stoneridge has a consensus price target of $19.50, indicating a potential upside of 20.74%. Given Stoneridge’s higher probable upside, analysts clearly believe Stoneridge is more favorable than Delphi Automotive PLC.

Earnings and Valuation

This table compares Delphi Automotive PLC and Stoneridge’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Delphi Automotive PLC	$17.01 billion	1.46	$3.06 billion	$4.72	19.68
Stoneridge	$759.88 million	0.60	$85.94 million	$2.70	5.98

Delphi Automotive PLC has higher revenue and earnings than Stoneridge. Stoneridge is trading at a lower price-to-earnings ratio than Delphi Automotive PLC, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

91.9% of Delphi Automotive PLC shares are owned by institutional investors. Comparatively, 89.4% of Stoneridge shares are owned by institutional investors. 0.3% of Delphi Automotive PLC shares are owned by insiders. Comparatively, 5.3% of Stoneridge shares are owned by 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

Delphi Automotive PLC beats Stoneridge on 12 of the 16 factors compared between the two stocks.

About Delphi Automotive PLC

Delphi Automotive PLC is a global technology company serving the automotive sector. The Company designs and manufactures vehicle components, and provides electrical and electronic, powertrain and active safety technology solutions to the global automotive and commercial vehicle markets. The Company’s segments include Electrical/Electronic Architecture, Powertrain Systems, and Electronics and Safety. The Electrical/Electronic Architecture segment provides complete design of the vehicle’s electrical architecture, including connectors, wiring assemblies and harnesses, electrical centers and hybrid high voltage and safety distribution systems. The Powertrain Systems segment offers products for engine management systems (EMS). The Electronics and Safety segment offers a range of electronic and safety equipment and software in the areas of controls, security, infotainment, communications and safety systems.

About Stoneridge

Stoneridge, Inc. is a designer and manufacturer of engineered electrical and electronic components, modules and systems for the automotive, commercial, motorcycle, off-highway and agricultural vehicle markets. The Company operates through three segments: Control Devices, Electronics and PST. The Company’s Control Devices segment designs and manufactures products that monitor, measure or activate specific functions within a vehicle and includes product lines, such as sensors, switches, valves, and actuators. The Company’s Electronics segment designs and manufactures electronic instrument clusters, electronic control units and driver information systems. The PST segment is engaged in the design, manufacture and sale of in-vehicle audio and video devices, electronic vehicle security alarms, convenience accessories, vehicle tracking devices and monitoring services primarily for the automotive and motorcycle industry. It operated in 25 locations in 12 countries, as of December 31, 2016.