Adient (ADNT) vs. General Motors (GM) Critical Survey

Adient (NYSE: ADNT) and General Motors (NYSE:GM) are both mid-cap cyclical consumer goods & services companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.

Institutional and Insider Ownership

92.6% of Adient shares are held by institutional investors. Comparatively, 73.0% of General Motors shares are held by institutional investors. 0.1% of Adient shares are held by company insiders. Comparatively, 0.0% of General Motors shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Adient pays an annual dividend of $1.10 per share and has a dividend yield of 1.4%. General Motors pays an annual dividend of $1.52 per share and has a dividend yield of 3.6%. Adient pays out 11.8% of its earnings in the form of a dividend. General Motors pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. General Motors has raised its dividend for 2 consecutive years. General Motors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Adient and General Motors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Adient 1 3 3 0 2.29
General Motors 3 11 9 1 2.33

Adient currently has a consensus target price of $76.43, suggesting a potential downside of 2.98%. General Motors has a consensus target price of $43.43, suggesting a potential upside of 3.90%. Given General Motors’ stronger consensus rating and higher probable upside, analysts clearly believe General Motors is more favorable than Adient.

Profitability

This table compares Adient and General Motors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Adient 5.47% 22.48% 7.35%
General Motors 2.00% 20.95% 4.08%

Valuation and Earnings

This table compares Adient and General Motors’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Adient $16.21 billion 0.45 $877.00 million $9.35 8.43
General Motors $166.38 billion 0.36 $9.43 billion $1.95 21.44

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

Summary

General Motors beats Adient on 9 of the 17 factors compared between the two stocks.

Adient Company Profile

Adient plc, formerly Adient Limited, is an automotive seating supplier. The Company designs, manufactures and markets a range of seating systems and components for passenger cars, commercial vehicles, and light trucks, including vans, pick-up trucks, and sport/crossover utility vehicles. The Company operates through two segments: Seating and Interiors. The Seating segment produces automotive seat metal structures, and mechanisms, foam, trim, fabric and complete seat systems. The Interiors segment produces instrument panels, floor consoles, door panels, overhead consoles, cockpit systems, decorative trim and other products. The Company also supplies various seating systems to the international motorsports industry through its RECARO brand of products. It operates approximately 230 manufacturing or assembly facilities, with operations in over 30 countries. Its technologies focus on offering automotive seating solutions in a range of areas, including frames, armrests and fabrics.

General Motors Company Profile

General Motors Company designs, builds and sells cars, trucks, crossovers and automobile parts. The Company’s segments include GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO), GM South America (GMSA) and General Motors Financial Company, Inc. (GM Financial). The Company provides automotive financing services through General Motors Financial Company, Inc. The Company develops, manufactures and/or markets vehicles in North America under the brands, including Buick, Cadillac, Chevrolet and GMC. The Company also develops, manufactures and/or markets vehicles outside North America under the brands, including Buick, Cadillac, Chevrolet, GMC, Holden, Opel and Vauxhall. The Company offers a range of after-sale vehicle services and products through the dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories and extended service warranties. GM Financial is an automotive finance company, which provides automobile finance solutions.

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