Contrasting BorgWarner (BWA) & Strattec Security (STRT)

BorgWarner (NYSE: BWA) and Strattec Security (NASDAQ:STRT) are both auto/tires/trucks companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitability, institutional ownership and valuation.

Profitability

This table compares BorgWarner and Strattec Security’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BorgWarner 4.68% 22.15% 8.79%
Strattec Security 2.34% 6.02% 3.69%

Volatility & Risk

BorgWarner has a beta of 1.87, suggesting that its share price is 87% more volatile than the S&P 500. Comparatively, Strattec Security has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500.

Dividends

BorgWarner pays an annual dividend of $0.68 per share and has a dividend yield of 1.6%. Strattec Security pays an annual dividend of $0.56 per share and has a dividend yield of 1.8%. BorgWarner pays out 17.5% of its earnings in the form of a dividend. BorgWarner has raised its dividend for 3 consecutive years.

Valuation & Earnings

This table compares BorgWarner and Strattec Security’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BorgWarner $9.80 billion 0.93 $439.90 million $3.89 11.10
Strattec Security $417.33 million 0.27 $7.19 million N/A N/A

BorgWarner has higher revenue and earnings than Strattec Security.

Insider & Institutional Ownership

93.4% of BorgWarner shares are held by institutional investors. Comparatively, 81.9% of Strattec Security shares are held by institutional investors. 0.7% of BorgWarner shares are held by insiders. Comparatively, 7.1% of Strattec Security shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for BorgWarner and Strattec Security, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BorgWarner 0 5 11 0 2.69
Strattec Security 0 0 0 0 N/A

BorgWarner currently has a consensus target price of $57.88, indicating a potential upside of 34.09%. Given BorgWarner’s higher possible upside, equities research analysts plainly believe BorgWarner is more favorable than Strattec Security.

Summary

BorgWarner beats Strattec Security on 12 of the 15 factors compared between the two stocks.

BorgWarner Company Profile

BorgWarner Inc. provides solutions for combustion, hybrid, and electric vehicles worldwide. It operates through two segments, Engine and Drivetrain. The Engine segment develops and manufactures turbochargers; and timing systems, such as timing chains, variable cam timing products, crankshaft and camshaft sprockets, tensioners, guides and snubbers, front-wheel drive transmission chains, four-wheel drive chains for light vehicles, and hybrid power transmission chains. It also provides emissions systems, including electric air pumps and exhaust gas recirculation (EGR) modules, EGR coolers, EGR valves, glow plugs, and instant starting systems; turbocharger actuators; and thermal systems products comprising viscous fan drives, polymer fans, and coolant pumps. The Drivetrain segment develops and manufactures friction and mechanical products, including dual and friction clutch modules, friction and separator plates, transmission bands, torque converter and one-way clutches, and torsional vibration dampers. It also offers control products comprising electro-hydraulic solenoids, transmission solenoid modules, and dual clutch control modules; torque management products, such as rear-wheel drive/all-wheel drive (AWD) transfer case systems, front wheel drive-AWD coupling systems, and cross-axle coupling systems; starters, alternators, and hybrid electric motors; and motor controllers, battery chargers, and uninterrupted power source systems. The company sells its products to original equipment manufacturers of light vehicles consisting of passenger cars, sport-utility vehicles, vans, and light trucks; commercial vehicles, such as medium-duty and heavy-duty trucks, and buses; and off-highway vehicles, including agricultural and construction machinery, and marine applications, as well as to tier one vehicle systems suppliers and the aftermarket for light, commercial, and off-highway vehicles. BorgWarner Inc. was founded in 1987 and is headquartered in Auburn Hills, Michigan.

Strattec Security Company Profile

Strattec Security Corporation engages in the design, development, manufacture, and marketing of automotive access control products under the VAST brand primarily in the United States. The company offers mechanical locks and keys, electronically enhanced locks and keys, steering column and instrument panel ignition lock housings, latches, power sliding side door systems, power lift gate systems, power deck lid systems, door handles, and related products. It also provides full service and aftermarket support services for its products. The company markets its products to automotive and light truck original equipment manufacturers, as well as other transportation-related manufacturers; and through wholesale distributors, other marketers, and users of component parts, as well as certain products to non-automotive commercial customers. It also exports its products to Europe, Asia, and South America. Strattec Security Corporation was founded in 1908 and is headquartered in Milwaukee, Wisconsin.

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


Leave a Reply