Analyzing BorgWarner (BWA) and Superior Industries International (SUP)

BorgWarner (NYSE:BWA) and Superior Industries International (NYSE:SUP) are both auto/tires/trucks companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, valuation, profitability, analyst recommendations, earnings and dividends.

Insider & Institutional Ownership

91.7% of BorgWarner shares are held by institutional investors. Comparatively, 84.5% of Superior Industries International shares are held by institutional investors. 0.7% of BorgWarner shares are held by insiders. Comparatively, 2.6% of Superior Industries International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for BorgWarner and Superior Industries International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BorgWarner 0 3 11 0 2.79
Superior Industries International 0 1 2 0 2.67

BorgWarner currently has a consensus target price of $56.92, indicating a potential upside of 50.39%. Superior Industries International has a consensus target price of $23.67, indicating a potential upside of 81.08%. Given Superior Industries International’s higher probable upside, analysts clearly believe Superior Industries International is more favorable than BorgWarner.

Valuation & Earnings

This table compares BorgWarner and Superior Industries International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BorgWarner $9.80 billion 0.81 $439.90 million $3.89 9.73
Superior Industries International $1.11 billion 0.30 -$6.20 million $1.10 11.88

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

Risk & Volatility

BorgWarner has a beta of 1.88, indicating that its share price is 88% more volatile than the S&P 500. Comparatively, Superior Industries International has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
BorgWarner 5.11% 22.83% 9.16%
Superior Industries International 1.12% 10.77% 3.15%

Dividends

BorgWarner pays an annual dividend of $0.68 per share and has a dividend yield of 1.8%. Superior Industries International pays an annual dividend of $0.36 per share and has a dividend yield of 2.8%. BorgWarner pays out 17.5% of its earnings in the form of a dividend. Superior Industries International pays out 32.7% 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. BorgWarner has raised its dividend for 3 consecutive years.

Summary

BorgWarner beats Superior Industries International on 13 of the 17 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.

Superior Industries International Company Profile

Superior Industries International, Inc. designs, manufactures, and sells aluminum wheels to the original equipment manufacturers in North America. It supplies cast aluminum wheels to the automobile and light truck manufacturers. The company was founded in 1957 and is headquartered in Southfield, Michigan.

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