Metaldyne Performance Group (NYSE: MPG) and Harman International Industries (NYSE:HAR) are both cyclical consumer goods & services companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, institutional ownership, earnings, analyst recommendations, dividends and profitability.

Institutional & Insider Ownership

18.6% of Metaldyne Performance Group shares are held by institutional investors. Comparatively, 85.8% of Harman International Industries shares are held by institutional investors. 5.1% of Metaldyne Performance Group shares are held by company insiders. Comparatively, 0.9% of Harman International Industries 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.

Profitability

This table compares Metaldyne Performance Group and Harman International Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Metaldyne Performance Group 2.60% 9.80% 2.11%
Harman International Industries 5.12% 15.69% 6.40%

Analyst Recommendations

This is a summary of current ratings and target prices for Metaldyne Performance Group and Harman International Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Metaldyne Performance Group 0 1 0 0 2.00
Harman International Industries 0 2 0 0 2.00

Metaldyne Performance Group currently has a consensus price target of $21.00, suggesting a potential downside of 4.11%. Given Metaldyne Performance Group’s higher possible upside, analysts plainly believe Metaldyne Performance Group is more favorable than Harman International Industries.

Earnings and Valuation

This table compares Metaldyne Performance Group and Harman International Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Metaldyne Performance Group N/A N/A N/A $1.39 15.76
Harman International Industries N/A N/A N/A $5.06 22.04

Metaldyne Performance Group is trading at a lower price-to-earnings ratio than Harman International Industries, indicating that it is currently the more affordable of the two stocks.

Dividends

Metaldyne Performance Group pays an annual dividend of $0.37 per share and has a dividend yield of 1.7%. Harman International Industries pays an annual dividend of $1.40 per share and has a dividend yield of 1.3%. Metaldyne Performance Group pays out 26.6% of its earnings in the form of a dividend. Harman International Industries pays out 27.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Metaldyne Performance Group has increased its dividend for 6 consecutive years. Metaldyne Performance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

About Metaldyne Performance Group

Metaldyne Performance Group Inc. provides components for use in engine, transmission and driveline (Powertrain) and chassis, suspension, steering and brake component (Safety-Critical) Platforms for the global light, commercial and industrial vehicle markets. The Company produces these components using complex metal-forming manufacturing technologies and processes for a customer base of vehicle original equipment manufacturers and Tier I suppliers. The Company operates through three segments: HHI, Metaldyne and Grede. Its metal-forming manufacturing technologies and processes include Aluminum Die Casting, Forging, Iron Casting and Powder Metal Forming, as well as value-added manufacturing processes, such as Advanced Machining and Assembly. These technologies and processes are used to create a range of customized Powertrain and Safety-Critical components that address requirements for power density, power generation, power/torque transfer, strength and noise, vibration and harshness.

About Harman International Industries

Harman International Industries, Incorporated is engaged in the designing and engineering of connected products and solutions for automakers, consumers and enterprises, including connected car systems, audio and visual products, enterprise automation solutions and connected services. The Company’s segments include Connected Car, Lifestyle Audio, Professional Solutions, Connected Services and Other. The Connected Car segment designs, manufactures and markets connected car systems for vehicle applications. The Lifestyle Audio segment designs, manufactures and markets car audio systems. The Professional Solutions segment designs, manufactures and markets a range of audio, lighting, video and control, and automation solutions for entertainment and enterprise applications The Connected Services segment includes the operations of Symphony Teleca Corporation, Red Bend Ltd. and its automotive services businesses. Its brands include AKG, AMX, Crown, Infinity, JBL, Revel, Soundcraft and Studer.

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