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

Profitability

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

Net Margins Return on Equity Return on Assets
Dana 10.80% 30.79% 6.84%
Gentherm 8.34% 16.34% 9.44%

Volatility and Risk

Dana has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500. Comparatively, Gentherm has a beta of 1.97, suggesting that its stock price is 97% more volatile than the S&P 500.

Insider and Institutional Ownership

98.6% of Dana shares are held by institutional investors. Comparatively, 96.8% of Gentherm shares are held by institutional investors. 1.6% of Dana shares are held by insiders. Comparatively, 2.3% of Gentherm shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Dana and Gentherm, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dana 1 5 3 0 2.22
Gentherm 0 3 4 0 2.57

Dana currently has a consensus target price of $23.50, suggesting a potential downside of 17.49%. Gentherm has a consensus target price of $40.43, suggesting a potential upside of 10.16%. Given Gentherm’s stronger consensus rating and higher possible upside, analysts plainly believe Gentherm is more favorable than Dana.

Dividends

Dana pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. Gentherm does not pay a dividend. Dana pays out 5.1% of its earnings in the form of a dividend. Gentherm has increased its dividend for 2 consecutive years.

Earnings and Valuation

This table compares Dana and Gentherm’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dana $6.37 billion 0.65 $704.00 million $4.71 6.05
Gentherm $961.81 million 1.41 $157.43 million $2.18 16.83

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

Summary

Gentherm beats Dana on 10 of the 17 factors compared between the two stocks.

About Dana

Dana Incorporated, formerly Dana Holding Corporation, is a global provider of technology driveline, sealing and thermal-management products. The Company operates in four segments: Light Vehicle Driveline Technologies (Light Vehicle), Commercial Vehicle Driveline Technologies (Commercial Vehicle), Off-Highway Driveline Technologies (Off-Highway) and Power Technologies. It has operations in North America, South America, Europe and Asia pacific. Its Light Vehicle segment offers products, such as front axles, rear axles, driveshafts/propshafts, differentials, torque couplings and modular assemblies. Its Commercial Vehicle segment offers products, such as steer axles, drive axles, drive shafts and tire inflation systems. Its Off-Highway segment offers products, such as front axles, rear axles, drive shafts, transmissions, torque converters, tire inflation systems and electronic controls. Its Power Technologies segment offers products, including gaskets and cover modules.

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.

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