Horizon Global Corporation (NYSE: HZN) and Meritor (NYSE:MTOR) are both small-cap auto/tires/trucks companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Institutional & Insider Ownership

94.0% of Horizon Global Corporation shares are owned by institutional investors. Comparatively, 93.2% of Meritor shares are owned by institutional investors. 1.3% of Horizon Global Corporation shares are owned by company insiders. Comparatively, 2.9% of Meritor shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Horizon Global Corporation has a beta of 1.87, suggesting that its stock price is 87% more volatile than the S&P 500. Comparatively, Meritor has a beta of 2.21, suggesting that its stock price is 121% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Horizon Global Corporation and Meritor, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Horizon Global Corporation 1 2 4 0 2.43
Meritor 0 1 4 0 2.80

Horizon Global Corporation currently has a consensus target price of $20.17, indicating a potential upside of 19.75%. Meritor has a consensus target price of $22.60, indicating a potential upside of 9.44%. Given Horizon Global Corporation’s higher probable upside, research analysts clearly believe Horizon Global Corporation is more favorable than Meritor.

Valuation and Earnings

This table compares Horizon Global Corporation and Meritor’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Horizon Global Corporation $792.20 million 0.53 $58.76 million ($0.67) -25.13
Meritor $3.15 billion 0.58 $255.00 million $6.02 3.43

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

Profitability

This table compares Horizon Global Corporation and Meritor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Horizon Global Corporation -1.45% 18.86% 2.76%
Meritor 17.03% -106.67% 5.68%

Summary

Meritor beats Horizon Global Corporation on 9 of the 13 factors compared between the two stocks.

Horizon Global Corporation Company Profile

Horizon Global Corporation is a designer, manufacturer and distributor of a range of custom-engineered towing, trailering, cargo management and other products serving the automotive aftermarket, retail and original equipment (OE) channels. The Company operates through three segments: Horizon Americas, Horizon Asia-Pacific, and Horizon Europe-Africa. Its towing product category includes devices and accessories installed on a tow-vehicle for the purpose of attaching a trailer and camper, among others, such as hitches and other towing accessories. Its trailering product category includes control devices and components of the trailer itself, such as brake controls and brake replacement parts. Its cargo management product category includes a range of products used to facilitate the transportation of various forms of cargo, to secure that cargo or to organize items. Its other product category includes a range of items, such as tubular push bars, side steps, and commercial brooms and brushes.

Meritor Company Profile

Meritor, Inc. is a supplier of a range of integrated systems, modules and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The Company’s segments include Commercial Truck & Industrial and Aftermarket & Trailer. The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, for medium- and heavy-duty trucks, off-highway, military, construction, bus and coach, fire and emergency and other applications in North America, South America, Europe and Asia Pacific. The Commercial Truck & Industrial segment also includes the Company’s aftermarket businesses in Asia Pacific and South America. The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement and remanufactured parts to commercial vehicle aftermarket customers in North America and Europe.

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