Gentherm (NASDAQ: THRM) and Magna International (NYSE:MGA) are both auto/tires/trucks companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Risk and Volatility

Gentherm has a beta of 1.93, suggesting that its stock price is 93% more volatile than the S&P 500. Comparatively, Magna International has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500.

Earnings & Valuation

This table compares Gentherm and Magna International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gentherm $961.81 million 1.18 $157.43 million $2.18 14.17
Magna International $36.92 billion 0.49 $4.00 billion $5.54 8.51

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

Institutional & Insider Ownership

98.2% of Gentherm shares are owned by institutional investors. Comparatively, 60.4% of Magna International shares are owned by institutional investors. 2.3% of Gentherm shares are owned by 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.

Profitability

This table compares Gentherm and Magna International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gentherm 8.34% 16.34% 9.44%
Magna International 5.73% 20.01% 9.12%

Dividends

Magna International pays an annual dividend of $1.10 per share and has a dividend yield of 2.3%. Gentherm does not pay a dividend. Magna International pays out 19.9% of its earnings in the form of a dividend. Magna International has increased its dividend for 5 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Gentherm and Magna International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gentherm 0 4 4 0 2.50
Magna International 1 3 8 1 2.69

Gentherm presently has a consensus price target of $40.43, suggesting a potential upside of 30.84%. Magna International has a consensus price target of $53.67, suggesting a potential upside of 13.82%. Given Gentherm’s higher possible upside, analysts clearly believe Gentherm is more favorable than Magna International.

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.

About Magna International

Magna International Inc. (Magna) is a global automotive supplier. The Company’s segments are North America, Europe, Asia, Rest of World, and Corporate and Other. The Company’s product capabilities include producing body, chassis, exterior, seating, powertrain, electronic, active driver assistance, vision, closure, and roof systems and modules, as well as vehicle engineering and contract manufacturing. The Company has over 320 manufacturing operations and approximately 100 product development, engineering and sales centers in over 30 countries. It provides a range of body, chassis and engineering solutions to its original equipment manufacturer (OEM) customers. It has capabilities in powertrain design, development, testing and manufacturing. It offers bumper fascia systems, exterior trim and modular systems. It offers exterior and interior mirror systems. It offers sealing, trim, engineered glass and module systems. It offers softtops, retractable hardtops, modular tops and hardtops.

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