Reviewing American Axle & Manufacturing (NYSE:DCH) and Garrett Motion (NYSE:GTX)

Garrett Motion (NYSE:GTX) and American Axle & Manufacturing (NYSE:DCH) are both auto/tires/trucks companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Garrett Motion and American Axle & Manufacturing, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Garrett Motion	0	2	4	0	2.67
American Axle & Manufacturing	1	1	2	0	2.25

Garrett Motion currently has a consensus price target of $18.80, suggesting a potential downside of 8.83%. American Axle & Manufacturing has a consensus price target of $13.50, suggesting a potential upside of 85.44%. Given American Axle & Manufacturing’s higher possible upside, analysts clearly believe American Axle & Manufacturing is more favorable than Garrett Motion.

Volatility & Risk

Garrett Motion has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500. Comparatively, American Axle & Manufacturing has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500.

Earnings and Valuation

This table compares Garrett Motion and American Axle & Manufacturing”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Garrett Motion	$3.54 billion	1.13	$261.00 million	$1.57	13.13
American Axle & Manufacturing	$5.84 billion	0.15	-$19.70 million	($0.18)	-40.44

Garrett Motion has higher earnings, but lower revenue than American Axle & Manufacturing. American Axle & Manufacturing is trading at a lower price-to-earnings ratio than Garrett Motion, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Garrett Motion and American Axle & Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Garrett Motion	8.12%	-38.75%	12.39%
American Axle & Manufacturing	-0.34%	9.92%	1.25%

Insider and Institutional Ownership

86.3% of Garrett Motion shares are held by institutional investors. Comparatively, 91.4% of American Axle & Manufacturing shares are held by institutional investors. 0.8% of Garrett Motion shares are held by company insiders. Comparatively, 3.7% of American Axle & Manufacturing 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.

Summary

Garrett Motion beats American Axle & Manufacturing on 8 of the 14 factors compared between the two stocks.

About Garrett Motion

Garrett Motion Inc., together with its subsidiaries, designs, manufactures, and sells turbocharging, air and fluid compression, and high-speed electric motor technologies for original equipment manufacturers and distributors worldwide. The company offers cutting-edge technology for the mobility and industrial space, including light vehicles, commercial vehicles, and industrial applications. In addition, it provides mechanical and electrical products for turbocharging and boosting internal combustion engines, as well as compressing air for fuel cell compressors, and compressing refrigerant for electric cooling compressors. The company offers its products in the aftermarket through distributors. Garrett Motion Inc. was incorporated in 2018 and is based in Rolle, Switzerland.

About American Axle & Manufacturing

American Axle & Manufacturing Holdings, Inc. is a leading supplier of driveline and drivetrain systems, modules and components for the light vehicle market world wide. It manufactures Driveline and Metal Forming technologies to support electric, hybrid and internal combustion vehicles. It’s the primary supplier of driveline components to its major customers include General Motors, Stellantis and Ford. It also sells various products to Ford & Stellantis from Metal Forming segment. It has the 2 operating segments. Driveline segment comprises front & rear axles, driveshafts, differential assemblies, clutch modules, balance shaft systems, disconnecting driveline technology, and electric & hybrid driveline products and systems for light trucks, SUVs, crossover vehicles, passenger cars and commercial vehicles. Metal Forming segment comprises axle & transmission shafts, ring and pinion gears, differential gears & assemblies, connecting rods and variable valve timing products for OEM and Tier 1 automotive suppliers.