Strattec Security Corporation (NASDAQ: STRT) and Dorman Products (NASDAQ:DORM) are both auto/tires/trucks companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Strattec Security Corporation and Dorman Products, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Strattec Security Corporation 0 0 0 0 N/A
Dorman Products 0 3 0 0 2.00

Dorman Products has a consensus price target of $78.00, suggesting a potential upside of 18.49%. Given Dorman Products’ higher possible upside, analysts clearly believe Dorman Products is more favorable than Strattec Security Corporation.

Volatility and Risk

Strattec Security Corporation has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, Dorman Products has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500.

Earnings & Valuation

This table compares Strattec Security Corporation and Dorman Products’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Strattec Security Corporation $417.33 million 0.28 $25.12 million $1.96 16.81
Dorman Products $892.77 million 2.51 $197.74 million $3.28 20.07

Dorman Products has higher revenue and earnings than Strattec Security Corporation. Strattec Security Corporation is trading at a lower price-to-earnings ratio than Dorman Products, indicating that it is currently the more affordable of the two stocks.

Dividends

Strattec Security Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 1.7%. Dorman Products does not pay a dividend. Strattec Security Corporation pays out 28.6% of its earnings in the form of a dividend.

Profitability

This table compares Strattec Security Corporation and Dorman Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Strattec Security Corporation 1.72% 4.53% 2.86%
Dorman Products 12.66% 18.64% 15.79%

Institutional and Insider Ownership

85.5% of Strattec Security Corporation shares are owned by institutional investors. Comparatively, 75.9% of Dorman Products shares are owned by institutional investors. 6.8% of Strattec Security Corporation shares are owned by company insiders. Comparatively, 11.7% of Dorman Products shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Dorman Products beats Strattec Security Corporation on 11 of the 14 factors compared between the two stocks.

About Strattec Security Corporation

Strattec Security Corporation designs, develops, manufactures and markets automotive access control products. The Company offers access control products, including mechanical locks and keys, electronically enhanced locks and keys, steering column and instrument panel ignition lock housings, latches, power sliding side door systems, power lift gate systems, power deck lid systems, door handles and related products for North American automotive customers. The Company supplies its products under the VAST brand name. The Company’s products are shipped to customer locations in the United States, Canada, Mexico, Europe, South America, Korea and China, and it also provides full service and aftermarket support. The Company provides its customers with engineered access control products, including locksets, fobs, push button ignition systems, steering column lock housings, seatback and secondary power liftgate systems, power decklids, door handles, and trim and other access products.

About Dorman Products

Dorman Products, Inc. is a supplier of replacement parts and fasteners for passenger cars, light trucks and heavy duty trucks in the automotive aftermarket. As of December 31, 2016, the Company distributed and marketed approximately 155,000 different stock keeping units (SKU’s) of automotive replacement parts and fasteners. As of December 31, 2016, approximately 83% of its products were sold under brands that it owned and the remainder of its products were sold for resale under customers’ private labels, other brands or in bulk. Its products are sold in the United States through automotive aftermarket retailers, national, regional and local warehouse distributors, and specialty markets, and salvage yards. It also distributes automotive replacement parts outside the United States, with sales primarily into Canada, Mexico, Europe, the Middle East, and Australia. Its parts are marketed under the OE Solutions, TECHoice, AutoGrade, Conduct-Tite, FirstStop and HD Solutions brand names.

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