Aptiv (NYSE: APTV) and Harman International Industries (NYSE:HAR) are both mid-cap cyclical consumer goods & services companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, institutional ownership, valuation, risk and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Aptiv 8.00% 57.92% 14.04%
Harman International Industries 5.12% 15.69% 6.40%

Risk and Volatility

Aptiv has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500. Comparatively, Harman International Industries has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500.

Insider and Institutional Ownership

90.8% of Aptiv shares are held by institutional investors. Comparatively, 85.8% of Harman International Industries shares are held by institutional investors. 0.3% of Aptiv 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 endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Aptiv and Harman International Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aptiv 1 3 15 0 2.74
Harman International Industries 0 1 0 0 2.00

Aptiv currently has a consensus price target of $86.83, suggesting a potential downside of 5.17%. Given Aptiv’s stronger consensus rating and higher probable upside, research analysts plainly believe Aptiv is more favorable than Harman International Industries.

Valuation and Earnings

This table compares Aptiv and Harman International Industries’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aptiv $16.66 billion 1.46 $1.26 billion $5.13 17.85
Harman International Industries N/A N/A N/A $5.06 22.04

Aptiv has higher revenue and earnings than Harman International Industries. Aptiv 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

Aptiv pays an annual dividend of $1.49 per share and has a dividend yield of 1.6%. Harman International Industries pays an annual dividend of $1.40 per share and has a dividend yield of 1.3%. Aptiv pays out 29.0% 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. Aptiv has increased its dividend for 7 consecutive years. Aptiv is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Aptiv beats Harman International Industries on 11 of the 15 factors compared between the two stocks.

Aptiv Company Profile

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.

Harman International Industries Company Profile

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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