Visteon (NYSE: VC) and Delphi Automotive (NYSE:DLPH) are both mid-cap auto/tires/trucks companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.

Profitability

This table compares Visteon and Delphi Automotive’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Visteon 4.83% 29.13% 9.06%
Delphi Automotive 8.00% 57.92% 14.04%

Insider & Institutional Ownership

91.1% of Delphi Automotive shares are owned by institutional investors. 0.2% of Visteon shares are owned by company insiders. Comparatively, 0.3% of Delphi Automotive shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Visteon and Delphi Automotive, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Visteon 0 5 9 0 2.64
Delphi Automotive 1 2 14 0 2.76

Visteon presently has a consensus price target of $122.33, indicating a potential downside of 4.23%. Delphi Automotive has a consensus price target of $99.44, indicating a potential downside of 4.66%. Given Visteon’s higher possible upside, research analysts plainly believe Visteon is more favorable than Delphi Automotive.

Risk & Volatility

Visteon has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Delphi Automotive has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500.

Earnings and Valuation

This table compares Visteon and Delphi Automotive’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Visteon $3.16 billion 1.26 $75.00 million $4.73 27.00
Delphi Automotive $16.66 billion 1.66 $1.26 billion $5.13 20.33

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

Dividends

Delphi Automotive pays an annual dividend of $1.16 per share and has a dividend yield of 1.1%. Visteon does not pay a dividend. Delphi Automotive pays out 22.6% of its earnings in the form of a dividend.

Summary

Delphi Automotive beats Visteon on 13 of the 16 factors compared between the two stocks.

About Visteon

Visteon Corporation is a global automotive supplier that designs, engineers and manufactures electronics products for original equipment vehicle manufacturer (OEM), including Ford, Mazda, Nissan/Renault, General Motors, Honda BMW and Daimler. The Company operates through Electronics segment. The Electronics segment provides vehicle cockpit electronics products to customers, including instrument clusters, information displays, infotainment, audio systems, telematics solutions and head up displays. It designs and manufacturers vehicle cockpit electronics components, modules and systems. It offers a range of information displays incorporating a sleek profile, craftsmanship and touch sensors, designed to deliver high performance for the automotive market. It offers a range of audio products, including audio head units, and analog and digital radios, which deliver consumer device connectivity. It offers an automotive-grade, integrated domain controller approach, called Smartcore.

About Delphi Automotive

Delphi Automotive PLC is a global technology company serving the automotive sector. The Company designs and manufactures vehicle components, and provides electrical and electronic, powertrain and active safety technology solutions to the global automotive and commercial vehicle markets. The Company’s segments include Electrical/Electronic Architecture, Powertrain Systems, and Electronics and Safety. The Electrical/Electronic Architecture segment provides complete design of the vehicle’s electrical architecture, including connectors, wiring assemblies and harnesses, electrical centers and hybrid high voltage and safety distribution systems. The Powertrain Systems segment offers products for engine management systems (EMS). The Electronics and Safety segment offers a range of electronic and safety equipment and software in the areas of controls, security, infotainment, communications and safety systems.

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