Autoliv (NYSE: ALV) and Motorcar Parts of America (NASDAQ:MPAA) are both auto/tires/trucks companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Profitability

This table compares Autoliv and Motorcar Parts of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Autoliv 5.44% 13.96% 6.75%
Motorcar Parts of America 8.75% 16.77% 9.31%

Analyst Ratings

This is a breakdown of current recommendations for Autoliv and Motorcar Parts of America, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Autoliv 4 11 6 0 2.10
Motorcar Parts of America 0 0 3 0 3.00

Autoliv currently has a consensus target price of $111.65, indicating a potential downside of 9.13%. Motorcar Parts of America has a consensus target price of $36.67, indicating a potential upside of 23.83%. Given Motorcar Parts of America’s stronger consensus rating and higher probable upside, analysts clearly believe Motorcar Parts of America is more favorable than Autoliv.

Valuation and Earnings

This table compares Autoliv and Motorcar Parts of America’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Autoliv $10.22 billion 1.04 $1.28 billion $6.32 19.44
Motorcar Parts of America $430.90 million 1.28 $77.71 million $1.93 15.34

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

Dividends

Autoliv pays an annual dividend of $2.40 per share and has a dividend yield of 2.0%. Motorcar Parts of America does not pay a dividend. Autoliv pays out 38.0% of its earnings in the form of a dividend. Autoliv has raised its dividend for 7 consecutive years.

Institutional and Insider Ownership

32.7% of Autoliv shares are owned by institutional investors. 0.3% of Autoliv shares are owned by company insiders. Comparatively, 4.4% of Motorcar Parts of America shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Autoliv has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Motorcar Parts of America has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Summary

Autoliv beats Motorcar Parts of America on 9 of the 17 factors compared between the two stocks.

Autoliv Company Profile

Autoliv, Inc. is a supplier of automotive safety systems with a range of product offerings, including passive safety systems and active safety systems. The Company operates through two segments: Passive Safety and Electronics. The Passive safety products include modules and components for passenger and driver-side airbags, side-impact airbag protection systems, seatbelts, steering wheels, inflator technologies, whiplash protection systems and child seats, and components for such systems, as well as passive safety electronic products, such as restraint electronics and crash sensors. The Active safety products include camera-based vision systems, night driving assist, automotive radars, brake controls, positioning systems, electronic control units, and other active safety systems. As of December 31, 2016, including joint venture operations, the Company had approximately 78 production facilities in 25 countries, consisting of both component factories and assembly factories.

Motorcar Parts of America Company Profile

Motorcar Parts of America, Inc. is a manufacturer, remanufacturer and distributor of automotive aftermarket parts, including alternators, starters, wheel hub assembly, brake master cylinders, brake power boosters and turbochargers utilized in imported and domestic passenger vehicles, light trucks and heavy-duty applications. The Company sells its products in North America to auto parts retail and traditional warehouse chains and to automobile manufacturers for both their aftermarket programs and their warranty replacement programs (OES). It recycles materials, including metal from the used cores and corrugated packaging. The Company carries over 13,000 stock keeping units (SKUs) for automotive parts that are sold under its customers’ recognized private label brand names and its Quality-Built, Pure Energy, Xtreme, Reliance and other brand names. It sells its products to automotive retail outlets and the professional repair market throughout the United States and Canada.

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