Critical Comparison: Gentherm (THRM) versus Autoliv (ALV)

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Gentherm and Autoliv, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gentherm 0 3 4 0 2.57
Autoliv 4 11 6 0 2.10

Gentherm currently has a consensus target price of $40.43, suggesting a potential upside of 11.07%. Autoliv has a consensus target price of $111.65, suggesting a potential downside of 9.21%. Given Gentherm’s stronger consensus rating and higher probable upside, research analysts clearly believe Gentherm is more favorable than Autoliv.

Dividends

Autoliv pays an annual dividend of $2.40 per share and has a dividend yield of 2.0%. Gentherm does not pay a dividend. Autoliv pays out 38.0% of its earnings in the form of a dividend. Autoliv has raised its dividend for 7 consecutive years.

Insider and Institutional Ownership

96.8% of Gentherm shares are owned by institutional investors. Comparatively, 32.8% of Autoliv shares are owned by institutional investors. 2.3% of Gentherm shares are owned by insiders. Comparatively, 0.3% of Autoliv shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Gentherm has a beta of 1.97, suggesting that its share price is 97% more volatile than the S&P 500. Comparatively, Autoliv has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Gentherm 8.34% 16.34% 9.44%
Autoliv 5.44% 13.96% 6.75%

Valuation & Earnings

This table compares Gentherm and Autoliv’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gentherm $961.81 million 1.39 $157.43 million $2.18 16.70
Autoliv $10.22 billion 1.05 $1.28 billion $6.32 19.46

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

Summary

Gentherm beats Autoliv on 10 of the 17 factors compared between the two stocks.

Gentherm Company Profile

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.

Autoliv Company Profile

Autoliv, Inc. is a supplier of automotive safety systems with a range of product offerings, including passive safety systems and active safety systems. The Company operates through two segments: Passive Safety and Electronics. The Passive safety products include modules and components for passenger and driver-side airbags, side-impact airbag protection systems, seatbelts, steering wheels, inflator technologies, whiplash protection systems and child seats, and components for such systems, as well as passive safety electronic products, such as restraint electronics and crash sensors. The Active safety products include camera-based vision systems, night driving assist, automotive radars, brake controls, positioning systems, electronic control units, and other active safety systems. As of December 31, 2016, including joint venture operations, the Company had approximately 78 production facilities in 25 countries, consisting of both component factories and assembly factories.

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