Modine Manufacturing (NYSE: MOD) and Dorman Products (NASDAQ:DORM) are both auto/tires/trucks companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Volatility and Risk

Modine Manufacturing has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Dorman Products has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Modine Manufacturing and Dorman Products, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Modine Manufacturing 0 0 1 0 3.00
Dorman Products 0 3 0 0 2.00

Dorman Products has a consensus target price of $78.00, suggesting a potential upside of 17.79%. Given Dorman Products’ higher probable upside, analysts clearly believe Dorman Products is more favorable than Modine Manufacturing.

Earnings and Valuation

This table compares Modine Manufacturing and Dorman Products’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Modine Manufacturing $1.67 billion 0.48 $142.90 million $0.45 35.78
Dorman Products $892.77 million 2.52 $197.74 million $3.28 20.19

Dorman Products has higher revenue, but lower earnings than Modine Manufacturing. Dorman Products is trading at a lower price-to-earnings ratio than Modine Manufacturing, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

83.4% of Modine Manufacturing shares are held by institutional investors. Comparatively, 75.6% of Dorman Products shares are held by institutional investors. 4.4% of Modine Manufacturing shares are held by company insiders. Comparatively, 11.7% of Dorman Products shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Modine Manufacturing and Dorman Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Modine Manufacturing 1.35% 11.16% 3.54%
Dorman Products 12.66% 18.64% 15.79%

Summary

Dorman Products beats Modine Manufacturing on 9 of the 14 factors compared between the two stocks.

About Modine Manufacturing

Modine Manufacturing Company provides engineered heat transfer systems and heat transfer components for use in on-highway and off-highway original equipment manufacturer (OEM) vehicular applications, and for sale into an array of building, industrial and refrigeration markets. The Company’s products include radiators and radiator cores, exhaust gas recirculation coolers, building heating, ventilating and air conditioning (HVAC) equipment, and coils. Its segments include Americas, Europe, Asia and Building HVAC. Its Americas segment consists of vehicular and industrial original equipment products in North America and South America, as well as aftermarket products in South America. Its Europe segment consists of vehicular and industrial original equipment products in Europe. Its Asia segment consists of vehicular and industrial original equipment products in Asia. Its Building HVAC segment consists of building heating, ventilating and air conditioning products throughout the world.

About Dorman Products

Dorman Products, Inc. is a supplier of replacement parts and fasteners for passenger cars, light trucks and heavy duty trucks in the automotive aftermarket. As of December 31, 2016, the Company distributed and marketed approximately 155,000 different stock keeping units (SKU’s) of automotive replacement parts and fasteners. As of December 31, 2016, approximately 83% of its products were sold under brands that it owned and the remainder of its products were sold for resale under customers’ private labels, other brands or in bulk. Its products are sold in the United States through automotive aftermarket retailers, national, regional and local warehouse distributors, and specialty markets, and salvage yards. It also distributes automotive replacement parts outside the United States, with sales primarily into Canada, Mexico, Europe, the Middle East, and Australia. Its parts are marketed under the OE Solutions, TECHoice, AutoGrade, Conduct-Tite, FirstStop and HD Solutions brand names.

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