Critical Review: Delphi Automotive (APTV) & Gentherm (THRM)

Delphi Automotive (NYSE: APTV) and Gentherm (NASDAQ:THRM) are both cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Dividends

Delphi Automotive pays an annual dividend of $1.49 per share and has a dividend yield of 1.8%. Gentherm does not pay a dividend. Delphi Automotive pays out 29.0% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Delphi Automotive and Gentherm’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Delphi Automotive $16.66 billion 1.35 $1.26 billion $5.13 16.54
Gentherm $917.60 million 1.27 $76.59 million $1.81 17.54

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

Profitability

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

Net Margins Return on Equity Return on Assets
Delphi Automotive 8.00% 57.92% 14.04%
Gentherm 6.89% 12.82% 7.68%

Insider & Institutional Ownership

90.8% of Delphi Automotive shares are owned by institutional investors. Comparatively, 99.3% of Gentherm shares are owned by institutional investors. 0.3% of Delphi Automotive shares are owned by insiders. Comparatively, 2.3% of Gentherm shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Delphi Automotive and Gentherm, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Delphi Automotive 1 3 14 0 2.72
Gentherm 0 2 5 0 2.71

Delphi Automotive currently has a consensus target price of $86.59, suggesting a potential upside of 2.07%. Gentherm has a consensus target price of $40.17, suggesting a potential upside of 26.51%. Given Gentherm’s higher possible upside, analysts clearly believe Gentherm is more favorable than Delphi Automotive.

Summary

Delphi Automotive beats Gentherm on 10 of the 15 factors compared between the two stocks.

About Delphi Automotive

Aptiv PLC, formerly Delphi Automotive PLC, is a global technology company serving the automotive sector. The Company designs and manufactures vehicle components, and provides electrical and electronic and active safety technology solutions to the global automotive and commercial vehicle markets. The Company’s segments include Electrical/Electronic Architecture, and Electronics & 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 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 Gentherm

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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