Denso (OTCMKTS:DNZOY) & Knorr-Bremse (OTCMKTS:KNRRY) Head to Head Analysis

Knorr-Bremse (OTCMKTS:KNRRY) and Denso (OTCMKTS:DNZOY) are both large-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Knorr-Bremse and Denso”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Knorr-Bremse	$8.84 billion	2.15	$604.17 million	$1.06	27.83
Denso	$50.09 billion	0.70	$2.93 billion	$1.03	11.63

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

Volatility and Risk

Knorr-Bremse has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500. Comparatively, Denso has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Knorr-Bremse and Denso, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Knorr-Bremse	1	2	5	0	2.50
Denso	1	2	0	0	1.67

Dividends

Knorr-Bremse pays an annual dividend of $0.33 per share and has a dividend yield of 1.1%. Denso pays an annual dividend of $0.26 per share and has a dividend yield of 2.2%. Knorr-Bremse pays out 31.1% of its earnings in the form of a dividend. Denso pays out 25.2% 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. Denso is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Knorr-Bremse and Denso’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Knorr-Bremse	7.37%	18.30%	6.53%
Denso	5.59%	7.85%	4.96%

Summary

Knorr-Bremse beats Denso on 8 of the 13 factors compared between the two stocks.

About Knorr-Bremse

Knorr-Bremse AG, together with its subsidiaries, engages in the development, production, marketing, and servicing of braking and other systems for rail and commercial vehicles worldwide. The company operates in two segments, Rail Vehicle Systems and Commercial Vehicle Systems. The Rail Vehicle Systems segment offers braking systems, entrance and HVAC systems, sanitary systems, coupling systems, digital solutions, smart services for optimizing rail traffic, power electrics, rail computing and communication (RCC)/TCMS, signaling systems, stationary and mobile testing equipment, windshield wiper and wash systems, and extensive aftermarket solutions. The Commercial Vehicle Systems segment provides pneumatic braking systems comprising brake control systems, disk brakes, drum brakes, brake cylinders, valves, and pedal units; steering systems; vehicle dynamics solutions, such as anti-lock braking systems and electronic stability programs; driver assistance systems; automated driving and electronic leveling control; energy supply and distribution systems, including compressors and air treatment products; and engine components and transmission control systems, such as vibration dampers, engine air management, transmission control, and gear/clutch actuation products for trucks, buses, trailers, and agricultural machinery. In addition, it offers leasing, holding, logistics, and media and IT services. The company was founded in 1905 and is headquartered in Munich, Germany. Knorr-Bremse AG is a subsidiary of KB Holding GmbH.

About Denso

DENSO Corporation engages in the manufacture and sale of automotive parts in Japan, rest of Asia, North America, Europe, and internationally. The company offers air-conditioning systems, including thermal management heat pump system, heat pump air-conditioning systems, refrigerant products, personal heating and cooling devices, air quality system, heat exchangers, bus air-conditioning systems, automotive freezers, and cooling products, as well as heating, ventilation, and air-conditioning units. It also provides gasoline, diesel, hybrid, electric vehicle, and fuel cell vehicle power-train systems; and safety and cockpit systems, such as driving environment recognition, vehicle dynamic control, collision safety, visibility support, cockpit information, and information security systems, as well as other products. In addition, the company offers automotive service parts and accessories, comprising spark plugs, oil and cabin air filters, wiper blades, air filter elements, starters, alternators, compressors, oxygen sensors, fuel pumps, air conditioner service parts, radiators, condensers, ion generators, air conditioners for busses and construction vehicles, and truck refrigeration products, as well as refrigerant recovery, recycling, and charging machines; and repair and support products and services. Further, it provides industrial solutions for factories in automotive parts production; agricultural solutions, including Profarm Controller, a climate control system for greenhouse and horticulture solutions; and household air conditioning equipment and industrial systems. The company was incorporated in 1949 and is headquartered in Kariya, Japan.