Superior Industries International (NYSE: SUP) and Meritor (NYSE:MTOR) are both auto/tires/trucks companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Risk & Volatility

Superior Industries International has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Meritor has a beta of 2.34, meaning that its share price is 134% more volatile than the S&P 500.

Dividends

Superior Industries International pays an annual dividend of $0.36 per share and has a dividend yield of 2.3%. Meritor does not pay a dividend. Superior Industries International pays out -180.0% of its earnings in the form of a dividend.

Institutional & Insider Ownership

83.4% of Superior Industries International shares are held by institutional investors. Comparatively, 98.1% of Meritor shares are held by institutional investors. 1.5% of Superior Industries International shares are held by insiders. Comparatively, 2.9% of Meritor shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Superior Industries International and Meritor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Superior Industries International 0.66% 7.96% 3.32%
Meritor 9.68% -1,152.54% 6.52%

Earnings and Valuation

This table compares Superior Industries International and Meritor’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Superior Industries International $732.70 million 0.53 $41.38 million ($0.20) -78.25
Meritor $3.35 billion 0.64 $324.00 million $3.55 6.79

Meritor has higher revenue and earnings than Superior Industries International. Superior Industries International is trading at a lower price-to-earnings ratio than Meritor, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Superior Industries International and Meritor, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Superior Industries International 0 1 2 0 2.67
Meritor 0 4 4 0 2.50

Superior Industries International presently has a consensus target price of $22.67, indicating a potential upside of 44.83%. Meritor has a consensus target price of $26.44, indicating a potential upside of 9.70%. Given Superior Industries International’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Superior Industries International is more favorable than Meritor.

Summary

Meritor beats Superior Industries International on 10 of the 16 factors compared between the two stocks.

About Superior Industries International

Superior Industries International, Inc. is engaged in the design and manufacture of aluminum wheels for sale to original equipment manufacturers (OEMs). The Company supplies cast aluminum wheels to automobile and light truck manufacturers, with wheel manufacturing operations in the United States and Mexico. The Company offers wheels in a range of finishes, which include Bright Machined, Polished Face with Painted Window, Fully Painted, Premium Paint, Polished, Chrome Clad and Mirror Finish Ultra Bright Machining. The Company’s products, which are manufactured in its North American facilities, are delivered primarily to automotive assembly operations in North America for global OEMs. Its OEM aluminum wheels are primarily sold for factory installation, as either optional or standard equipment, on various vehicle models. As of December 31, 2015, the Company operated five manufacturing facilities in the United States and Mexico.

About Meritor

Meritor, Inc. is a supplier of a range of integrated systems, modules and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The Company’s segments include Commercial Truck & Industrial and Aftermarket & Trailer. The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, for medium- and heavy-duty trucks, off-highway, military, construction, bus and coach, fire and emergency and other applications in North America, South America, Europe and Asia Pacific. The Commercial Truck & Industrial segment also includes the Company’s aftermarket businesses in Asia Pacific and South America. The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement and remanufactured parts to commercial vehicle aftermarket customers in North America and Europe.

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