Meritor (NYSE: MTOR) and Metaldyne Performance Group (NYSE:MPG) are both auto/tires/trucks companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.
Volatility and Risk
Meritor has a beta of 2.3, meaning that its share price is 130% more volatile than the S&P 500. Comparatively, Metaldyne Performance Group has a beta of 2.07, meaning that its share price is 107% more volatile than the S&P 500.
This is a breakdown of current ratings and target prices for Meritor and Metaldyne Performance Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Metaldyne Performance Group||0||2||0||0||2.00|
Meritor presently has a consensus target price of $25.44, suggesting a potential downside of 3.06%. Metaldyne Performance Group has a consensus target price of $17.50, suggesting a potential downside of 20.99%. Given Meritor’s stronger consensus rating and higher probable upside, equities analysts plainly believe Meritor is more favorable than Metaldyne Performance Group.
This table compares Meritor and Metaldyne Performance Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Metaldyne Performance Group||2.60%||9.80%||2.11%|
Earnings & Valuation
This table compares Meritor and Metaldyne Performance Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Meritor||$3.15 billion||0.74||$255.00 million||$6.02||4.36|
|Metaldyne Performance Group||N/A||N/A||N/A||$1.44||15.38|
Meritor has higher revenue and earnings than Metaldyne Performance Group. Meritor is trading at a lower price-to-earnings ratio than Metaldyne Performance Group, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
93.2% of Meritor shares are owned by institutional investors. Comparatively, 18.6% of Metaldyne Performance Group shares are owned by institutional investors. 2.9% of Meritor shares are owned by company insiders. Comparatively, 5.1% of Metaldyne Performance Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Metaldyne Performance Group pays an annual dividend of $0.37 per share and has a dividend yield of 1.7%. Meritor does not pay a dividend. Metaldyne Performance Group pays out 25.7% of its earnings in the form of a dividend.
Meritor beats Metaldyne Performance Group on 11 of the 14 factors compared between the two stocks.
Meritor, Inc. is a supplier of a range of integrated systems, modules and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The Company’s segments include Commercial Truck & Industrial and Aftermarket & Trailer. The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, for medium- and heavy-duty trucks, off-highway, military, construction, bus and coach, fire and emergency and other applications in North America, South America, Europe and Asia Pacific. The Commercial Truck & Industrial segment also includes the Company’s aftermarket businesses in Asia Pacific and South America. The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement and remanufactured parts to commercial vehicle aftermarket customers in North America and Europe.
About Metaldyne Performance Group
Metaldyne Performance Group Inc. provides components for use in engine, transmission and driveline (Powertrain) and chassis, suspension, steering and brake component (Safety-Critical) Platforms for the global light, commercial and industrial vehicle markets. The Company produces these components using complex metal-forming manufacturing technologies and processes for a customer base of vehicle original equipment manufacturers and Tier I suppliers. The Company operates through three segments: HHI, Metaldyne and Grede. Its metal-forming manufacturing technologies and processes include Aluminum Die Casting, Forging, Iron Casting and Powder Metal Forming, as well as value-added manufacturing processes, such as Advanced Machining and Assembly. These technologies and processes are used to create a range of customized Powertrain and Safety-Critical components that address requirements for power density, power generation, power/torque transfer, strength and noise, vibration and harshness.
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