Analyzing Tenneco (TEN) and Delphi Automotive PLC (DLPH)

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

Dividends

Tenneco pays an annual dividend of $1.00 per share and has a dividend yield of 1.6%. Delphi Automotive PLC pays an annual dividend of $1.16 per share and has a dividend yield of 1.2%. Tenneco pays out 19.7% of its earnings in the form of a dividend. Delphi Automotive PLC pays out 24.6% 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. Tenneco is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

94.4% of Tenneco shares are owned by institutional investors. Comparatively, 90.1% of Delphi Automotive PLC shares are owned by institutional investors. 2.7% of Tenneco shares are owned by insiders. Comparatively, 0.3% of Delphi Automotive PLC shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Tenneco and Delphi Automotive PLC, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tenneco 1 4 4 0 2.33
Delphi Automotive PLC 1 4 13 0 2.67

Tenneco currently has a consensus target price of $66.63, indicating a potential upside of 8.33%. Delphi Automotive PLC has a consensus target price of $103.94, indicating a potential upside of 6.63%. Given Tenneco’s higher possible upside, equities analysts plainly believe Tenneco is more favorable than Delphi Automotive PLC.

Profitability

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

Net Margins Return on Equity Return on Assets
Tenneco 3.17% 54.06% 7.95%
Delphi Automotive PLC 7.51% 60.14% 14.35%

Valuation & Earnings

This table compares Tenneco and Delphi Automotive PLC’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tenneco $8.86 billion 0.37 $630.00 million $5.07 12.13
Delphi Automotive PLC $17.01 billion 1.53 $3.06 billion $4.72 20.65

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

Volatility and Risk

Tenneco has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500. Comparatively, Delphi Automotive PLC has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500.

Summary

Delphi Automotive PLC beats Tenneco on 9 of the 16 factors compared between the two stocks.

Tenneco Company Profile

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.

Delphi Automotive PLC Company Profile

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.

Receive News & Ratings for Tenneco Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Tenneco Inc. and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply