Meritor (NYSE: MTOR) and Gentherm (NASDAQ:THRM) are both auto/tires/trucks companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, analyst recommendations, profitability, risk and earnings.
Valuation and Earnings
This table compares Meritor and Gentherm’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Meritor||$3.35 billion||0.68||$324.00 million||$2.97||8.65|
|Gentherm||$917.60 million||1.27||$76.59 million||$1.81||17.49|
This is a summary of recent ratings and target prices for Meritor and Gentherm, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Meritor presently has a consensus target price of $29.50, suggesting a potential upside of 14.88%. Gentherm has a consensus target price of $40.17, suggesting a potential upside of 26.91%. Given Gentherm’s higher possible upside, analysts clearly believe Gentherm is more favorable than Meritor.
Insider and Institutional Ownership
97.5% of Meritor shares are held by institutional investors. Comparatively, 99.3% of Gentherm shares are held by institutional investors. 2.3% of Meritor shares are held by company insiders. Comparatively, 2.3% of Gentherm shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Risk and Volatility
Meritor has a beta of 2.45, meaning that its stock price is 145% more volatile than the S&P 500. Comparatively, Gentherm has a beta of 1.86, meaning that its stock price is 86% more volatile than the S&P 500.
This table compares Meritor and Gentherm’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Meritor beats Gentherm on 10 of the 14 factors compared between the two stocks.
Meritor Company Profile
Meritor, Inc. is a supplier of a range of integrated systems, modules and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The Company’s segments include Commercial Truck & Industrial and Aftermarket & Trailer. The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, for medium- and heavy-duty trucks, off-highway, military, construction, bus and coach, fire and emergency and other applications in North America, South America, Europe and Asia Pacific. The Commercial Truck & Industrial segment also includes the Company’s aftermarket businesses in Asia Pacific and South America. The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement and remanufactured parts to commercial vehicle aftermarket customers in North America and Europe.
Gentherm Company Profile
Gentherm Incorporated (Gentherm) is a global technology company engaged in the design, development, and manufacturing of thermal management technologies. The Company has two segments: Automotive and Industrial. Its products provide solutions for automotive passenger comfort and convenience, battery thermal management, remote power generation, patient temperature management, environmental product testing and other consumer and industrial temperature control needs. Its automotive products can be found on the vehicles of all major automotive manufacturers operating in North America, Europe and Asia. The Automotive segment comprises the results from its global automotive businesses and individual convenience products. The Industrial segment represents the combined results from its remote power generation systems business, patient temperature management systems business, environmental testing equipment and services business, and advanced research and product development division.
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