Federal-Mogul (NASDAQ:FDML) and Tenneco (TEN) Head to Head Comparison

Tenneco (NYSE: TEN) and Federal-Mogul (NASDAQ:FDML) are both auto/tires/trucks companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.

Earnings and Valuation

This table compares Tenneco and Federal-Mogul’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tenneco $8.60 billion 0.35 $363.00 million $3.31 17.54
Federal-Mogul N/A N/A N/A $0.49 20.37

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Tenneco and Federal-Mogul, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tenneco 1 5 5 0 2.36
Federal-Mogul 0 0 0 0 N/A

Tenneco presently has a consensus price target of $67.70, suggesting a potential upside of 16.58%. Given Tenneco’s higher possible upside, equities research analysts plainly believe Tenneco is more favorable than Federal-Mogul.

Dividends

Tenneco pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. Federal-Mogul does not pay a dividend. Tenneco pays out 30.2% of its earnings in the form of a dividend.

Profitability

This table compares Tenneco and Federal-Mogul’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tenneco 1.97% 54.13% 7.77%
Federal-Mogul 0.31% 16.56% 2.17%

Insider and Institutional Ownership

95.0% of Tenneco shares are owned by institutional investors. Comparatively, 98.5% of Federal-Mogul shares are owned by institutional investors. 2.7% of Tenneco shares are owned by company insiders. Comparatively, 82.1% of Federal-Mogul shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Tenneco beats Federal-Mogul on 8 of the 11 factors compared between the two stocks.

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.

About Federal-Mogul

Federal-Mogul Holdings Corp, formerly Federal-Mogul Corporation, is a global supplier of technology and innovation in vehicle and industrial products for fuel economy, emissions reduction and safety systems. The Company serves original equipment manufacturers (OEM) and servicers (OES) (collectively OE) of automotive, light, medium and heavy-duty commercial vehicles, off-road, agricultural, marine, rail, aerospace, power generation and industrial equipment, as well as the worldwide aftermarket. As of December 31, 2012, the Company had OEM products included on more than 300 global vehicle platforms and more than 700 global powertrains used in light, medium and heavy-duty vehicles. The Company offers brands, OE replacement and premium products for all aftermarket customers.

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