Comparing Schaeffler (OTCMKTS:SCFLF) and Gentherm (NASDAQ:THRM)

Schaeffler (OTCMKTS:SCFLF) and Gentherm (NASDAQ:THRM) are both auto/tires/trucks companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.

Valuation & Earnings

This table compares Schaeffler and Gentherm”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Schaeffler	$19.68 billion	N/A	-$683.89 million	$0.24	20.00
Gentherm	$1.46 billion	0.78	$64.95 million	$1.00	37.37

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

Profitability

This table compares Schaeffler and Gentherm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Schaeffler	-4.73%	-10.43%	-1.77%
Gentherm	2.08%	9.55%	4.80%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Schaeffler and Gentherm, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Schaeffler	0	0	1	0	3.00
Gentherm	1	2	2	1	2.50

Gentherm has a consensus target price of $43.00, indicating a potential upside of 15.07%. Given Gentherm’s higher possible upside, analysts clearly believe Gentherm is more favorable than Schaeffler.

Institutional & Insider Ownership

97.1% of Gentherm shares are owned by institutional investors. 1.4% of Gentherm shares are owned by 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.

Summary

Gentherm beats Schaeffler on 11 of the 13 factors compared between the two stocks.

About Schaeffler

Schaeffler AG, together with its subsidiaries, develops, manufactures, and sells components and system for industrial applications in Europe, the Americas, China, and the Asia Pacific. The Automotive Technologies division offers mechanical, mechatronic, and electronic components and systems for powertrain electrification used in passenger cars and commercial vehicles, such as electric motors, axle transmissions, axle drives, power electronics, hybrid modules, electromechanical and hydraulic actuators, and thermal management module; torque converters, hybrid dampers, clutches, variable valve train systems, valve-lash adjustment elements, balancer shafts, camshaft phasing systems, timing drives, and front end auxillary drives. This division provides rolling bearing application and products, such as wheel, ball, and needle roller bearings; and mechanical components and mechatronic systems for steering and other chassis applications, including Space Drive, a steer-by-wire system. The Automotive Aftermarket division offers components and repair solutions for light commercial vehicles, trucks and buses, and offroad sectors under the LuK, INA, and FAG brand names, as well as service for repair shops under the REPXPERT brand. The Industrial division develops and manufactures rotary and linear bearing solutions, drive technology components and systems, and service solutions, such as sensor-based condition monitoring systems. This division serves customers in the wind, raw materials, aerospace, rail, offroad, two wheelers, power transmission, and industrial automation sectors. The company was formerly known as INA Beteiligungsgesellschaft mit beschränkter Haftung and changed its name to Schaeffler AG in October 2014. The company was founded in 1946 and is headquartered in Herzogenaurach, Germany. Schaeffler AG is a subsidiary of IHO Verwaltungs GmbH.

About Gentherm

Gentherm Incorporated designs, develops, manufactures, and sells thermal management and pneumatic comfort technologies in the United States and internationally. The company operates in two segments, Automotive and Medical. The Automotive segment offers climate comfort systems, which include seat heaters, blowers, and thermoelectric devices for variable temperature climate control seats and steering wheel heaters that are designed to provide thermal comfort to automobile passengers; integrated electronic components, such as electronic control units; and other climate comfort systems, including neck and shoulder conditioners and climate control system products for door panels, armrests, cupholders, and storage bins. It also provides battery performance solutions comprising cell connecting devices and battery cable technologies used for various types of automotive batteries; thermal management products for heating and cooling; and automotive electronic and software systems, including electronic control units for climate comfort systems, as well as for memory seat modules and other devices. In addition, it offers lumbar and massage comfort solutions, such as lumbar support, side bolster adjustment, multi-contour seats, and massage systems; automotive cable systems, including ready-made individual cables, and ready-to-install cable networks; and valve systems products consisting of applications that offer solutions in fuel management, and other valves for brake and engine systems. This segment serves light vehicle original equipment manufacturers and tier 1s, such as automotive seat manufacturers, and aftermarket seat distributors and installers. The Medical segment offers patient temperature management systems. The company was formerly known as Amerigon Incorporated and changed its name to Gentherm Incorporated in September 2012. Gentherm Incorporated was incorporated in 1991 and is headquartered in Northville, Michigan.