Analyzing Lear (LEA) and Gentex (GNTX)
Lear (NASDAQ: GNTX) and Gentex (NASDAQ:GNTX) are both auto/tires/trucks companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.
Institutional & Insider Ownership
91.3% of Lear shares are held by institutional investors. Comparatively, 85.9% of Gentex shares are held by institutional investors. 0.4% of Lear shares are held by insiders. Comparatively, 0.6% of Gentex shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This table compares Lear and Gentex’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares Lear and Gentex’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Lear||$20.47 billion||0.52||$1.31 billion||$17.00||9.51|
|Gentex||$1.79 billion||3.43||$406.79 million||$1.28||17.90|
Lear has higher revenue and earnings than Gentex. Lear is trading at a lower price-to-earnings ratio than Gentex, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Lear has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Gentex has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500.
Lear pays an annual dividend of $2.80 per share and has a dividend yield of 1.7%. Gentex pays an annual dividend of $0.44 per share and has a dividend yield of 1.9%. Lear pays out 16.5% of its earnings in the form of a dividend. Gentex pays out 34.4% 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. Lear has raised its dividend for 7 consecutive years and Gentex has raised its dividend for 7 consecutive years.
This is a breakdown of recent ratings and recommmendations for Lear and Gentex, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Lear currently has a consensus target price of $205.59, indicating a potential upside of 27.13%. Gentex has a consensus target price of $25.67, indicating a potential upside of 12.03%. Given Lear’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Lear is more favorable than Gentex.
Lear beats Gentex on 9 of the 16 factors compared between the two stocks.
Lear Company Profile
Lear Corporation designs, develops, engineers, manufactures, assembles, and supplies automotive seating, and electrical distribution systems and related components primarily to automotive original equipment manufacturers worldwide. The company operates through Seating and E-Systems segments. The Seating segment includes seat systems and related components, such as leather and fabric products, seat trim covers, recliner mechanisms, seat tracks, seat structures and mechanisms, seat foams, and headrests primarily for automobiles and light trucks, compact cars, and sport utility vehicles, as well as thermoelectric seat heating and cooling systems. The E-Systems segment offers electrical distribution systems that route electrical signals and manage electrical power within the vehicle for traditional vehicle architectures, as well as high power and hybrid electric systems. This segment's products include wire harnesses, terminals and connectors, and junction boxes; and electronic control modules, such as body control modules, smart junction boxes, gateway modules, wireless control modules, lighting control modules and audio domain controllers, and amplifiers, as well as associated software. It also offers wireless systems comprising passive entry, remote keyless entry, and dual range/dual function remote keyless entry systems. The company was founded in 1917 and is headquartered in Southfield, Michigan.
Gentex Company Profile
Gentex Corporation provides automatic-dimming and non-dimming rearview mirrors, and electronics for the automotive industry; dimmable aircraft windows for the aviation industry; and commercial smoke alarms and signaling devices for the fire protection industry worldwide. It designs, develops, manufactures, and markets automotive products, including interior and exterior electrochromic automatic-dimming rearview mirrors, automotive electronics, and interior and exterior non-automatic-dimming rearview mirrors with electronic features for automotive passenger cars, light trucks, pick-up trucks, sport utility vehicles, and vans for original equipment manufacturers, tier one automotive mirror manufacturers, and various aftermarket and accessory customers. The company also provides photoelectric smoke detectors and alarms, audible and visual signaling alarms, electrochemical carbon monoxide detectors and alarms, and bells and speakers for use in fire detection systems in office buildings, hotels, and other commercial and residential establishments. Gentex Corporation sells its fire protection products directly, as well as through sales managers and manufacturer representative organizations to fire protection and security product distributors, electrical wholesale houses, and original equipment manufacturers of fire protection systems. The company was founded in 1974 and is headquartered in Zeeland, Michigan.
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