Tenneco (NYSE: TEN) and Visteon Corporation (NYSE:VC) are both mid-cap auto/tires/trucks companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Insider & Institutional Ownership

94.9% of Tenneco shares are held by institutional investors. 2.7% of Tenneco shares are held by company insiders. Comparatively, 0.2% of Visteon Corporation shares are held by company 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.

Dividends

Tenneco pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Visteon Corporation does not pay a dividend. Tenneco pays out 19.7% of its earnings in the form of a dividend.

Volatility & Risk

Tenneco has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500. Comparatively, Visteon Corporation has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.

Profitability

This table compares Tenneco and Visteon Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tenneco 3.17% 54.06% 7.95%
Visteon Corporation 4.35% 27.56% 8.67%

Earnings and Valuation

This table compares Tenneco and Visteon Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tenneco $8.86 billion 0.31 $630.00 million $5.07 10.21
Visteon Corporation $3.17 billion 1.11 $335.00 million $4.19 27.06

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

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tenneco 1 4 4 0 2.33
Visteon Corporation 0 4 7 0 2.64

Tenneco currently has a consensus price target of $66.63, suggesting a potential upside of 28.77%. Visteon Corporation has a consensus price target of $112.60, suggesting a potential downside of 0.70%. Given Tenneco’s higher probable upside, analysts clearly believe Tenneco is more favorable than Visteon Corporation.

Summary

Tenneco beats Visteon Corporation on 9 of the 16 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 Visteon Corporation

Visteon Corporation is a global automotive supplier that designs, engineers and manufactures electronics products for original equipment vehicle manufacturer (OEM), including Ford, Mazda, Nissan/Renault, General Motors, Honda BMW and Daimler. The Company operates through Electronics segment. The Electronics segment provides vehicle cockpit electronics products to customers, including instrument clusters, information displays, infotainment, audio systems, telematics solutions and head up displays. It designs and manufacturers vehicle cockpit electronics components, modules and systems. It offers a range of information displays incorporating a sleek profile, craftsmanship and touch sensors, designed to deliver high performance for the automotive market. It offers a range of audio products, including audio head units, and analog and digital radios, which deliver consumer device connectivity. It offers an automotive-grade, integrated domain controller approach, called Smartcore.

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