Critical Review: Continental (CTTAY) & The Competition

Continental (OTCMKTS:CTTAY) is one of 148 public companies in the “Automobile Components” industry, but how does it contrast to its rivals? We will compare Continental to similar businesses based on the strength of its earnings, analyst recommendations, valuation, risk, dividends, profitability and institutional ownership.

Insider and Institutional Ownership

0.0% of Continental shares are owned by institutional investors. Comparatively, 48.4% of shares of all “Automobile Components” companies are owned by institutional investors. 19.6% of shares of all “Automobile Components” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Continental and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Continental	$22.26 billion	-$186.68 million	-27.43
Continental Competitors	$6.51 billion	$70.54 million	3.21

Continental has higher revenue, but lower earnings than its rivals. Continental is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Risk & Volatility

Continental has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500. Comparatively, Continental’s rivals have a beta of 3.88, meaning that their average stock price is 288% more volatile than the S&P 500.

Profitability

This table compares Continental and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Continental	5.35%	18.14%	4.51%
Continental Competitors	-40.75%	0.02%	-1.93%

Dividends

Continental pays an annual dividend of $0.21 per share and has a dividend yield of 2.6%. Continental pays out -70.0% of its earnings in the form of a dividend. As a group, “Automobile Components” companies pay a dividend yield of 11.0% and pay out 24.2% of their earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Continental and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Continental	0	4	5	0	2.56
Continental Competitors	1088	4500	6137	202	2.46

As a group, “Automobile Components” companies have a potential upside of 71.36%. Given Continental’s rivals higher probable upside, analysts plainly believe Continental has less favorable growth aspects than its rivals.

Summary

Continental beats its rivals on 8 of the 15 factors compared.

Continental Company Profile

Continental Aktiengesellschaft, a technology company, offers intelligent solutions for vehicles, machines, traffic, and transportation worldwide. It operates through four sectors: Automotive, Tires, ContiTech, and Contract Manufacturing. The company offers safety, brake, chassis, motion, and motion control systems; solutions for assisted and automated driving; display and operating technologies; and audio and camera solutions for the vehicle interior, as well as intelligent information and communication technology solutions. It also provides tires for cars, trucks, buses, two-wheel, and specialist vehicles, as well as digital tire monitoring and management systems; and engages in retail of tires. In addition, the company develops products and systems made from rubber, plastic, metal and textiles for the energy, agriculture, and construction, as well as interior design, automotive, transportation, and railway engineering sectors; and provides contract manufacturing services. The company was formerly known as Continental-Caoutchouc- und Gutta-Percha Compagnie. Continental Aktiengesellschaft was founded in 1871 and is headquartered in Hanover, Germany.