Contrasting Tenneco (TEN) and Fenix Parts (FENX)

Tenneco (NYSE: TEN) and Fenix Parts (OTCMKTS:FENX) are both cyclical consumer goods & services companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Earnings & Valuation

This table compares Tenneco and Fenix Parts’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tenneco $8.60 billion 0.35 $363.00 million $3.22 18.13
Fenix Parts $132.10 million 0.03 -$42.86 million ($2.03) -0.11

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Tenneco and Fenix Parts, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tenneco 1 5 5 0 2.36
Fenix Parts 0 0 0 0 N/A

Tenneco presently has a consensus target price of $67.00, suggesting a potential upside of 14.77%. Given Tenneco’s higher possible upside, equities analysts clearly believe Tenneco is more favorable than Fenix Parts.

Dividends

Tenneco pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. Fenix Parts does not pay a dividend. Tenneco pays out 31.1% of its earnings in the form of a dividend.

Insider & Institutional Ownership

94.4% of Tenneco shares are owned by institutional investors. Comparatively, 4.1% of Fenix Parts shares are owned by institutional investors. 2.7% of Tenneco shares are owned by company insiders. Comparatively, 16.6% of Fenix Parts shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Tenneco has a beta of 1.91, meaning that its stock price is 91% more volatile than the S&P 500. Comparatively, Fenix Parts has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Profitability

This table compares Tenneco and Fenix Parts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tenneco 1.97% 54.13% 7.77%
Fenix Parts -30.56% -66.11% -34.71%

Summary

Tenneco beats Fenix Parts on 13 of the 15 factors compared between the two stocks.

About Tenneco

Tenneco Inc. is a producer of clean air and ride performance products and systems for light vehicle, commercial truck, off-highway and other vehicle applications. The Company designs, manufactures and distributes highly engineered products for both original equipment vehicle manufacturers (OEMs) and the repair and replacement markets, or aftermarket, across the world. The Company operates through six segments: North America Clean Air; North America Ride Performance; Europe, South America and India Clean Air; Europe, South America and India Ride Performance; Asia Pacific Clean Air, and Asia Pacific Ride Performance. The Company serves both original equipment (OE) vehicle designers and manufacturers and the repair and replacement markets, or aftermarket, globally through brands, including Monroe, Rancho, Clevite Elastomers, Axios, Kinetic and Fric-Rot ride performance products and Walker, XNOx, Fonos, DynoMax and Thrush clean air products.

About Fenix Parts

Fenix Parts, Inc. is engaged in auto recycling business. The Company recovers and resells original equipment manufacturer (OEM) parts, components and systems, such as engines, transmissions, radiators, trunks, lamps and seats reclaimed from damaged, totaled or low value vehicles. The Company operates through Automobile Recycling segment. The Company purchases its vehicles primarily at auto salvage auctions. Upon receipt of vehicles, the Company inventories and then dismantles the vehicles and sells the recycled components. Its customers include collision repair shops (body shops), mechanical repair shops, auto dealerships and individual retail customers. The Company also generates a portion of its revenue from the sale as scrap of the unusable parts and materials, from the sale of used cars and motorcycles, the sale of aftermarket parts, and from the sale of extended warranty contracts.

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