Financial Survey: Lear (NYSE:LEA) vs. Goodyear Tire & Rubber (NASDAQ:GT)

Goodyear Tire & Rubber (NASDAQ:GT) and Lear (NYSE:LEA) are both mid-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Profitability

This table compares Goodyear Tire & Rubber and Lear’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Goodyear Tire & Rubber	-11.64%	0.93%	0.18%
Lear	2.25%	13.69%	4.71%

Insider & Institutional Ownership

84.2% of Goodyear Tire & Rubber shares are held by institutional investors. Comparatively, 97.0% of Lear shares are held by institutional investors. 0.5% of Goodyear Tire & Rubber shares are held by company insiders. Comparatively, 1.0% of Lear shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Goodyear Tire & Rubber and Lear”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Goodyear Tire & Rubber	$18.28 billion	0.11	-$1.72 billion	($7.24)	-0.96
Lear	$23.26 billion	0.28	$436.80 million	$10.00	13.06

Lear has higher revenue and earnings than Goodyear Tire & Rubber. Goodyear Tire & Rubber is trading at a lower price-to-earnings ratio than Lear, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Goodyear Tire & Rubber has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Lear has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Goodyear Tire & Rubber and Lear, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Goodyear Tire & Rubber	2	5	2	0	2.00
Lear	0	9	5	1	2.47

Goodyear Tire & Rubber currently has a consensus price target of $8.54, indicating a potential upside of 22.92%. Lear has a consensus price target of $145.31, indicating a potential upside of 11.24%. Given Goodyear Tire & Rubber’s higher possible upside, equities research analysts clearly believe Goodyear Tire & Rubber is more favorable than Lear.

Summary

Lear beats Goodyear Tire & Rubber on 14 of the 15 factors compared between the two stocks.

About Goodyear Tire & Rubber

Goodyear Tire & Rubber Co. engages in the development, manufacture, distribution, and sale of tires. It operates through the following geographical segments: Americas, Europe, Middle East, and Africa, and Asia Pacific. The Americas segment is involved in the development, manufacture, distribution, and sale of tires and related products and services in North, Central, and South America. The Europe, Middle East, and Africa segment focuses on the development, manufacture, distribution, and sale of tires for automobiles, trucks, buses, aircraft, motorcycles, earthmoving, mining, and industrial equipment throughout Europe, the Middle East, and Africa. The Asia Pacific segment refers to the development, manufacture, distribution, and sales of tires for automobiles, trucks, buses, aircraft, farm, earthmoving, mining, and industrial equipment throughout the Asia Pacific region. The company was founded by Frank A. Seiberling on August 29, 1898 and is headquartered in Akron, OH.

About Lear

Lear Corporation designs, develops, engineers, manufactures, assembles, and supplies automotive seating, and electrical distribution systems and related components for automotive original equipment manufacturers in North America, Europe, Africa, Asia, and South America. Its Seating segment offers seat systems, seat subsystems, keyseat components, seat trim covers, seat mechanisms, seat foams, and headrests, as well as surface materials, such as leather and fabric for automobiles and light trucks, compact cars, pick-up trucks, and sport utility vehicles. The company’s E-Systems segment provides electrical distribution and connection systems that route electrical signals and networks; and manage electrical power within the vehicle for various powertrains. This segment’s products comprise wire harnesses, terminals and connectors, engineered components, and junction boxes; electronic system products, including body domain control modules, smart and passive junction boxes, gateway and communication modules, integrated power modules, and high voltage switching and power control systems. It also offers software and connected services comprising Xevo Market, an in-vehicle commerce and service platform; and software and services for the cloud, vehicles, and mobile devices. In addition, this segment provides cybersecurity software; advanced vehicle positioning for automated and autonomous driving applications; and short-range communication and cellular protocols for vehicle connectivity. It offers its products and services under the XEVO, GUILFORD, EAGLE OTTAWA, ConfigurE+, INTUTM, LEAR CONNEXUSTM, EXO, JOURNEYWARE, ProTec, SMART JUNCTION BOX, STRUCSURE, AVENTINO, and TeXstyle brands. Lear Corporation was founded in 1917 and is headquartered in Southfield, Michigan.