Meritor (NYSE: MTOR) and Cooper-Standard (NYSE:CPS) are both mid-cap auto, truck & motorcycle parts – nec companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Valuation and Earnings

This table compares Meritor and Cooper-Standard’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Meritor $3.35 billion 0.64 $324.00 million $3.64 6.60
Cooper-Standard $3.47 billion 0.60 $138.98 million $7.31 16.14

Meritor has higher earnings, but lower revenue than Cooper-Standard. Meritor is trading at a lower price-to-earnings ratio than Cooper-Standard, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Meritor and Cooper-Standard, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Meritor 0 4 5 0 2.56
Cooper-Standard 1 3 2 0 2.17

Meritor currently has a consensus price target of $26.83, suggesting a potential upside of 11.76%. Cooper-Standard has a consensus price target of $114.80, suggesting a potential downside of 2.70%. Given Meritor’s stronger consensus rating and higher probable upside, equities analysts plainly believe Meritor is more favorable than Cooper-Standard.

Volatility and Risk

Meritor has a beta of 2.28, indicating that its share price is 128% more volatile than the S&P 500. Comparatively, Cooper-Standard has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

Institutional & Insider Ownership

96.2% of Meritor shares are held by institutional investors. Comparatively, 96.0% of Cooper-Standard shares are held by institutional investors. 2.9% of Meritor shares are held by company insiders. Comparatively, 1.1% of Cooper-Standard shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Meritor and Cooper-Standard’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Meritor 9.68% -1,152.54% 6.52%
Cooper-Standard 2.93% 12.30% 3.91%

Summary

Meritor beats Cooper-Standard on 11 of the 14 factors compared between the two stocks.

Meritor Company Profile

Meritor, Inc. is a supplier of a range of integrated systems, modules and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The Company’s segments include Commercial Truck & Industrial and Aftermarket & Trailer. The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, for medium- and heavy-duty trucks, off-highway, military, construction, bus and coach, fire and emergency and other applications in North America, South America, Europe and Asia Pacific. The Commercial Truck & Industrial segment also includes the Company’s aftermarket businesses in Asia Pacific and South America. The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement and remanufactured parts to commercial vehicle aftermarket customers in North America and Europe.

Cooper-Standard Company Profile

Cooper-Standard Holdings Inc. is a holding company. The Company designs, manufactures and sells sealing, fuel and brake delivery, fluid transfer and anti-vibration systems for use in passenger vehicles and light trucks manufactured by global original equipment manufacturers (OEMs). The Company operates through four segments: North America, Europe, Asia Pacific and South America. The Company’s products are used in passenger vehicles and light trucks. As of December 31, 2016, the Company’s operations were conducted through 123 leased and joint venture facilities in 20 countries (North America: Canada, Mexico and the United States; Asia Pacific: China, India, Japan, South Korea and Thailand; Europe: Czech Republic, France, Germany, Italy, the Netherlands, Poland, Romania, Serbia, Spain, Sweden and the United Kingdom, and South America: Brazil), of which 90 are manufacturing facilities and 33 have design, engineering, administrative or logistics designations.

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