Visteon (NYSE: VC) and Meritor (NYSE:MTOR) are both cyclical consumer goods & services companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.
Institutional and Insider Ownership
95.5% of Meritor shares are held by institutional investors. 0.2% of Visteon shares are held by insiders. Comparatively, 2.3% of Meritor shares are held 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.
This is a breakdown of recent ratings for Visteon and Meritor, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Visteon currently has a consensus target price of $123.33, indicating a potential downside of 1.44%. Meritor has a consensus target price of $26.83, indicating a potential upside of 14.38%. Given Meritor’s higher possible upside, analysts clearly believe Meritor is more favorable than Visteon.
This table compares Visteon and Meritor’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares Visteon and Meritor’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Visteon||$3.16 billion||1.23||$75.00 million||$5.23||23.93|
|Meritor||$3.35 billion||0.63||$324.00 million||$3.55||6.61|
Meritor has higher revenue and earnings than Visteon. Meritor is trading at a lower price-to-earnings ratio than Visteon, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Visteon has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Meritor has a beta of 2.28, meaning that its share price is 128% more volatile than the S&P 500.
Visteon Company Profile
Visteon Corporation is a global automotive supplier that designs, engineers and manufactures electronics products for original equipment vehicle manufacturer (OEM), including Ford, Mazda, Nissan/Renault, General Motors, Honda BMW and Daimler. The Company operates through Electronics segment. The Electronics segment provides vehicle cockpit electronics products to customers, including instrument clusters, information displays, infotainment, audio systems, telematics solutions and head up displays. It designs and manufacturers vehicle cockpit electronics components, modules and systems. It offers a range of information displays incorporating a sleek profile, craftsmanship and touch sensors, designed to deliver high performance for the automotive market. It offers a range of audio products, including audio head units, and analog and digital radios, which deliver consumer device connectivity. It offers an automotive-grade, integrated domain controller approach, called Smartcore.
Meritor Company Profile
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.
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