Head-To-Head Contrast: Harman International Industries (HAR) and Tenneco (TEN)

Harman International Industries (NYSE: HAR) and Tenneco (NYSE:TEN) are both mid-cap auto, truck & motorcycle parts – nec companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.

Profitability

This table compares Harman International Industries and Tenneco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Harman International Industries 5.12% 15.69% 6.40%
Tenneco 1.97% 54.13% 7.77%

Earnings and Valuation

This table compares Harman International Industries and Tenneco’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Harman International Industries N/A N/A N/A $5.06 22.04
Tenneco $8.60 billion 0.33 $363.00 million $3.31 16.83

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

Analyst Recommendations

This is a breakdown of recent ratings for Harman International Industries and Tenneco, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Harman International Industries 0 6 0 0 2.00
Tenneco 1 5 5 0 2.36

Harman International Industries currently has a consensus target price of $111.67, indicating a potential upside of 0.15%. Tenneco has a consensus target price of $67.70, indicating a potential upside of 21.50%. Given Tenneco’s stronger consensus rating and higher possible upside, analysts plainly believe Tenneco is more favorable than Harman International Industries.

Insider and Institutional Ownership

85.8% of Harman International Industries shares are held by institutional investors. Comparatively, 97.8% of Tenneco shares are held by institutional investors. 0.9% of Harman International Industries shares are held by company insiders. Comparatively, 2.7% of Tenneco shares are held by company 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.

Dividends

Harman International Industries pays an annual dividend of $1.40 per share and has a dividend yield of 1.3%. Tenneco pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. Harman International Industries pays out 27.7% of its earnings in the form of a dividend. Tenneco pays out 30.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Harman International Industries has increased its dividend for 6 consecutive years.

Volatility and Risk

Harman International Industries has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500. Comparatively, Tenneco has a beta of 1.92, meaning that its share price is 92% more volatile than the S&P 500.

Summary

Tenneco beats Harman International Industries on 10 of the 14 factors compared between the two stocks.

About Harman International Industries

Harman International Industries, Incorporated is engaged in the designing and engineering of connected products and solutions for automakers, consumers and enterprises, including connected car systems, audio and visual products, enterprise automation solutions and connected services. The Company’s segments include Connected Car, Lifestyle Audio, Professional Solutions, Connected Services and Other. The Connected Car segment designs, manufactures and markets connected car systems for vehicle applications. The Lifestyle Audio segment designs, manufactures and markets car audio systems. The Professional Solutions segment designs, manufactures and markets a range of audio, lighting, video and control, and automation solutions for entertainment and enterprise applications The Connected Services segment includes the operations of Symphony Teleca Corporation, Red Bend Ltd. and its automotive services businesses. Its brands include AKG, AMX, Crown, Infinity, JBL, Revel, Soundcraft and Studer.

About Tenneco

Tenneco Inc. is a producer of clean air and ride performance products and systems for light vehicle, commercial truck, off-highway and other vehicle applications. The Company designs, manufactures and distributes highly engineered products for both original equipment vehicle manufacturers (OEMs) and the repair and replacement markets, or aftermarket, across the world. The Company operates through six segments: North America Clean Air; North America Ride Performance; Europe, South America and India Clean Air; Europe, South America and India Ride Performance; Asia Pacific Clean Air, and Asia Pacific Ride Performance. The Company serves both original equipment (OE) vehicle designers and manufacturers and the repair and replacement markets, or aftermarket, globally through brands, including Monroe, Rancho, Clevite Elastomers, Axios, Kinetic and Fric-Rot ride performance products and Walker, XNOx, Fonos, DynoMax and Thrush clean air products.

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