Critical Analysis: BorgWarner (BWA) and Horizon Global Corporation (HZN)
BorgWarner (NYSE: BWA) and Horizon Global Corporation (NYSE:HZN) are both auto/tires/trucks companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, valuation, risk, dividends, analyst recommendations and institutional ownership.
Insider & Institutional Ownership
91.1% of BorgWarner shares are held by institutional investors. Comparatively, 94.0% of Horizon Global Corporation shares are held by institutional investors. 0.7% of BorgWarner shares are held by company insiders. Comparatively, 1.3% of Horizon Global Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
BorgWarner pays an annual dividend of $0.56 per share and has a dividend yield of 1.1%. Horizon Global Corporation does not pay a dividend. BorgWarner pays out 62.9% of its earnings in the form of a dividend. Horizon Global Corporation has raised its dividend for 2 consecutive years.
Risk & Volatility
BorgWarner has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500. Comparatively, Horizon Global Corporation has a beta of 1.87, suggesting that its share price is 87% more volatile than the S&P 500.
This table compares BorgWarner and Horizon Global Corporation’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%|
This is a summary of recent recommendations for BorgWarner and Horizon Global Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Horizon Global Corporation||1||2||4||0||2.43|
BorgWarner presently has a consensus target price of $43.36, suggesting a potential downside of 11.08%. Horizon Global Corporation has a consensus target price of $20.17, suggesting a potential upside of 18.21%. Given Horizon Global Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Horizon Global Corporation is more favorable than BorgWarner.
Earnings & Valuation
This table compares BorgWarner and Horizon Global Corporation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|BorgWarner||$9.27 billion||1.11||$1.54 billion||$0.89||54.79|
|Horizon Global Corporation||$792.20 million||0.54||$58.76 million||($0.67)||-25.46|
BorgWarner has higher revenue and earnings than Horizon Global Corporation. Horizon Global Corporation is trading at a lower price-to-earnings ratio than BorgWarner, indicating that it is currently the more affordable of the two stocks.
BorgWarner beats Horizon Global Corporation on 8 of the 15 factors compared between the two stocks.
BorgWarner Inc. is engaged in providing technology solutions for combustion, hybrid and electric vehicles. The Company’s segments include Engine and Drivetrain. The Engine segment’s products include turbochargers, timing devices and chains, emissions systems and thermal systems. The Engine segment develops and manufactures products for gasoline and diesel engines, and alternative powertrains. The Drivetrain segment’s products include transmission components and systems, all-wheel drive (AWD) torque transfer systems and rotating electrical devices. The Company’s products are manufactured and sold across the world, primarily to original equipment manufacturers (OEMs) of light vehicles (passenger cars, sport-utility vehicles (SUVs), vans and light trucks). The Company’s products are also sold to other OEMs of commercial vehicles (medium-duty trucks, heavy-duty trucks and buses) and off-highway vehicles (agricultural and construction machinery and marine applications.
About Horizon Global Corporation
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.
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