Analyzing Holley (NYSE:HLLY) and Lear (NYSE:LEA)

Lear (NYSE:LEA) and Holley (NYSE:HLLY) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, profitability, earnings, analyst recommendations, institutional ownership, dividends and valuation.

Institutional & Insider Ownership

97.0% of Lear shares are held by institutional investors. Comparatively, 39.7% of Holley shares are held by institutional investors. 1.0% of Lear shares are held by insiders. Comparatively, 4.9% of Holley shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Lear and Holley’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lear	2.46%	14.92%	5.10%
Holley	1.68%	8.41%	3.23%

Earnings & Valuation

This table compares Lear and Holley”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lear	$23.26 billion	0.25	$436.80 million	$11.45	10.36
Holley	$613.51 million	0.57	$19.17 million	$0.08	36.19

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

Risk & Volatility

Lear has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, Holley has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Lear and Holley, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lear	0	12	3	1	2.31
Holley	1	3	3	0	2.29

Lear presently has a consensus price target of $143.25, indicating a potential upside of 20.80%. Holley has a consensus price target of $4.90, indicating a potential upside of 69.26%. Given Holley’s higher probable upside, analysts clearly believe Holley is more favorable than Lear.

Summary

Lear beats Holley on 9 of the 14 factors compared between the two stocks.

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.

About Holley

Holley Inc. operates as designer, manufacturer, and marketer of automotive aftermarket products for car and truck enthusiasts in the United States, Canada, Europe, and China. Its products span various automotive platforms and sells across multiple channels. The company's performance automotive products include carburetors, fuel pumps, fuel injection systems, nitrous oxide injection systems, superchargers, exhaust headers, mufflers, distributors, ignition components, engine tuners, automotive performance plumbing products; and exhaust products, as well as shifters, converters, transmission kits, transmissions, tuners, and automotive software. It also offers brakes and brake systems, vehicle restoration parts, helmets, head and neck restraints, seat belts, fire suits, and electronic control and monitoring systems. The company sells its products under the Holley, Holley EFI, MSD, Simpson, Powerteq, Accel, and Flowmaster through DTC, E-tailer, warehouse distributor, traditional retailer, and jobber/ installer channels. Holley Inc. was founded in 1903 and is headquartered in Bowling Green, Kentucky.