Comparing Aptiv (APTV) and Gentherm (THRM)

Gentherm (NASDAQ: THRM) and Aptiv (NYSE:APTV) are both cyclical consumer goods & services companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, institutional ownership, risk and profitability.

Insider and Institutional Ownership

99.3% of Gentherm shares are held by institutional investors. Comparatively, 90.8% of Aptiv shares are held by institutional investors. 2.3% of Gentherm shares are held by company insiders. Comparatively, 0.3% of Aptiv shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Gentherm and Aptiv’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gentherm $917.60 million 1.28 $76.59 million $1.81 17.73
Aptiv $16.66 billion 1.44 $1.26 billion $5.13 17.63

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

Analyst Ratings

This is a breakdown of current ratings for Gentherm and Aptiv, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gentherm 1 2 5 0 2.50
Aptiv 1 3 15 0 2.74

Gentherm currently has a consensus price target of $40.17, suggesting a potential upside of 25.13%. Aptiv has a consensus price target of $93.44, suggesting a potential upside of 3.30%. Given Gentherm’s higher possible upside, equities research analysts clearly believe Gentherm is more favorable than Aptiv.

Volatility and Risk

Gentherm has a beta of 1.95, suggesting that its stock price is 95% more volatile than the S&P 500. Comparatively, Aptiv has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Gentherm 6.89% 12.82% 7.68%
Aptiv 8.00% 57.92% 14.04%

Dividends

Aptiv pays an annual dividend of $1.49 per share and has a dividend yield of 1.6%. Gentherm does not pay a dividend. Aptiv pays out 29.0% of its earnings in the form of a dividend.

Summary

Aptiv beats Gentherm on 10 of the 16 factors compared between the two stocks.

About Gentherm

Gentherm Incorporated (Gentherm) is a global technology company engaged in the design, development, and manufacturing of thermal management technologies. The Company has two segments: Automotive and Industrial. Its products provide solutions for automotive passenger comfort and convenience, battery thermal management, remote power generation, patient temperature management, environmental product testing and other consumer and industrial temperature control needs. Its automotive products can be found on the vehicles of all major automotive manufacturers operating in North America, Europe and Asia. The Automotive segment comprises the results from its global automotive businesses and individual convenience products. The Industrial segment represents the combined results from its remote power generation systems business, patient temperature management systems business, environmental testing equipment and services business, and advanced research and product development division.

About Aptiv

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.

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