Delphi Automotive (NYSE: APTV) and Tenneco (NYSE:TEN) are both mid-cap cyclical consumer goods & services companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, analyst recommendations, risk, valuation, dividends and institutional ownership.

Profitability

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

Net Margins Return on Equity Return on Assets
Delphi Automotive 9.37% 51.96% 11.96%
Tenneco 1.97% 54.13% 7.77%

Dividends

Delphi Automotive pays an annual dividend of $1.49 per share and has a dividend yield of 1.7%. Tenneco pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. Delphi Automotive pays out 29.0% of its earnings in the form of a dividend. Tenneco pays out 31.1% 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.

Analyst Recommendations

This is a breakdown of recent recommendations for Delphi Automotive and Tenneco, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Delphi Automotive 1 3 14 0 2.72
Tenneco 1 5 5 0 2.36

Delphi Automotive currently has a consensus target price of $88.24, indicating a potential upside of 3.37%. Tenneco has a consensus target price of $67.70, indicating a potential upside of 20.01%. Given Tenneco’s higher probable upside, analysts clearly believe Tenneco is more favorable than Delphi Automotive.

Institutional and Insider Ownership

91.1% of Delphi Automotive shares are held by institutional investors. Comparatively, 95.0% of Tenneco shares are held by institutional investors. 0.3% of Delphi Automotive shares are held by company insiders. Comparatively, 2.7% of Tenneco shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Delphi Automotive $16.66 billion 1.36 $1.26 billion $5.13 16.64
Tenneco $8.60 billion 0.34 $363.00 million $3.22 17.52

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

Volatility & Risk

Delphi Automotive has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500. Comparatively, Tenneco has a beta of 1.91, suggesting that its share price is 91% more volatile than the S&P 500.

Summary

Delphi Automotive beats Tenneco on 10 of the 16 factors compared between the two stocks.

About Delphi Automotive

Aptiv PLC, formerly Delphi Automotive PLC, is a global technology company serving the automotive sector. The Company designs and manufactures vehicle components, and provides electrical and electronic and active safety technology solutions to the global automotive and commercial vehicle markets. The Company’s segments include Electrical/Electronic Architecture, and Electronics & 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 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.

About Tenneco

Tenneco Inc. is a producer of clean air and ride performance products and systems for light vehicle, commercial truck, off-highway and other vehicle applications. The Company designs, manufactures and distributes highly engineered products for both original equipment vehicle manufacturers (OEMs) and the repair and replacement markets, or aftermarket, across the world. The Company operates through six segments: North America Clean Air; North America Ride Performance; Europe, South America and India Clean Air; Europe, South America and India Ride Performance; Asia Pacific Clean Air, and Asia Pacific Ride Performance. The Company serves both original equipment (OE) vehicle designers and manufacturers and the repair and replacement markets, or aftermarket, globally through brands, including Monroe, Rancho, Clevite Elastomers, Axios, Kinetic and Fric-Rot ride performance products and Walker, XNOx, Fonos, DynoMax and Thrush clean air products.

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