American Axle (AXL) versus Tower International (TOWR) Head-To-Head Analysis

American Axle (NYSE: AXL) and Tower International (NYSE:TOWR) are both small-cap auto/tires/trucks companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Profitability

This table compares American Axle and Tower International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Axle 4.92% 28.46% 5.30%
Tower International 2.32% 28.77% 6.15%

Risk & Volatility

American Axle has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500. Comparatively, Tower International has a beta of 2.33, indicating that its share price is 133% more volatile than the S&P 500.

Earnings & Valuation

This table compares American Axle and Tower International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Axle $6.27 billion 0.29 $337.10 million $3.75 4.30
Tower International $1.99 billion 0.30 $47.62 million $3.76 7.69

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

Dividends

Tower International pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. American Axle does not pay a dividend. Tower International pays out 12.8% of its earnings in the form of a dividend. Tower International has increased its dividend for 2 consecutive years.

Institutional & Insider Ownership

90.7% of Tower International shares are held by institutional investors. 1.0% of American Axle shares are held by insiders. Comparatively, 6.2% of Tower International shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for American Axle and Tower International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Axle 2 2 7 0 2.45
Tower International 0 1 2 0 2.67

American Axle currently has a consensus target price of $19.50, indicating a potential upside of 20.97%. Tower International has a consensus target price of $35.50, indicating a potential upside of 22.84%. Given Tower International’s stronger consensus rating and higher possible upside, analysts plainly believe Tower International is more favorable than American Axle.

Summary

Tower International beats American Axle on 12 of the 17 factors compared between the two stocks.

About American Axle

American Axle & Manufacturing Holdings, Inc., together with its subsidiaries, designs, engineers, validates, and manufactures driveline, metal forming, powertrain, and casting products. The company's Driveline segment offers axles, driveshafts, power transfer units, rear drive modules, transfer cases, and electric and hybrid driveline products and systems for light trucks, sport utility vehicles, crossover vehicles, passenger cars, and commercial vehicles. Its Metal Forming segment provides axle and transmission shafts, ring and pinion gears, differential gears, transmission gears and shafts, and suspension components for original equipment manufacturers and automotive suppliers. The company's Powertrain segment offers transmission module and differential assemblies, transmission valve bodies, connecting rod forging and assemblies, torsional vibration dampers, and variable valve timing products for original equipment manufacturers and automotive suppliers. Its Casting segment produces thin wall castings and high strength ductile iron castings, as well as differential cases, steering knuckles, control arms, brackets, and turbo charger housings for the light vehicle, commercial, and industrial markets. The company has operations in the United States, Canada, Mexico, South America, China, Europe, other Asian countries, and internationally. American Axle & Manufacturing Holdings, Inc. was founded in 1994 and is headquartered in Detroit, Michigan.

About Tower International

Tower International, Inc. manufactures and sells engineered automotive structural metal components and assemblies primarily for original equipment manufacturers. It operates in two segments, North America and Europe. The company provides body structures and assemblies, including structural metal components, which comprise body pillars, roof rails, and side sills; and Class A surfaces and assemblies that consist of body sides, hoods, doors, fenders, and pickup truck boxes. It also offers lower vehicle frames and structures, such as pickup truck and sport utility vehicle (SUV) full frames, automotive engine and rear suspension cradles, floor pan components, and cross members. In addition, the company offers complex body-in-white assemblies comprising various components and sub-assemblies. Its products have applications in small and large cars, crossovers, pickups, and SUVs. The company was formerly known as Tower Automotive, LLC and changed its name to Tower International, Inc. in October 2010. Tower International, Inc. was founded in 1993 and is headquartered in Livonia, Michigan.

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