Critical Review: Bridgestone (BRDCY) and Its Rivals

Bridgestone (OTCMKTS:BRDCY) is one of 119 public companies in the “Automobiles” industry, but how does it compare to its rivals? We will compare Bridgestone to related companies based on the strength of its institutional ownership, earnings, valuation, analyst recommendations, profitability, dividends and risk.

Risk and Volatility

Bridgestone has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, Bridgestone’s rivals have a beta of 0.96, suggesting that their average stock price is 4% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bridgestone	N/A	N/A	N/A
Bridgestone Competitors	-1,371.58%	-125.36%	-10.43%

Insider & Institutional Ownership

39.1% of shares of all “Automobiles” companies are held by institutional investors. 57.1% of Bridgestone shares are held by company insiders. Comparatively, 13.9% of shares of all “Automobiles” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Bridgestone pays an annual dividend of $0.22 per share and has a dividend yield of 1.7%. Bridgestone pays out 34.4% of its earnings in the form of a dividend. As a group, “Automobiles” companies pay a dividend yield of 150.9% and pay out 7.2% of their earnings in the form of a dividend. Bridgestone lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Ratings

This is a summary of current ratings and recommmendations for Bridgestone and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bridgestone	0	3	0	1	2.50
Bridgestone Competitors	2034	5028	6301	185	2.34

As a group, “Automobiles” companies have a potential upside of 78.12%. Given Bridgestone’s rivals higher possible upside, analysts plainly believe Bridgestone has less favorable growth aspects than its rivals.

Valuation and Earnings

This table compares Bridgestone and its rivals top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Bridgestone	$29.63 billion	$2.19 billion	20.83
Bridgestone Competitors	$53.39 billion	$1.13 billion	5.28

Bridgestone’s rivals have higher revenue, but lower earnings than Bridgestone. Bridgestone is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

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

Bridgestone Company Profile

Bridgestone Corporation, together with its subsidiaries, manufactures and sells tires and rubber products. The company offers tires and tire tubes for passenger cars, trucks, buses, construction and off-road mining vehicles, industrial and agricultural machinery, aircraft, motorcycles, scooters, and other vehicles; automotive parts; automotive maintenance and repair services; and raw materials for tires and other products. It also provides chemical products, such as belts, hoses, rubber crawlers/MT pads, resin piping systems, seismic isolation rubbers, bridge rubber bearings, and block type rubber covered chain type bridge fall prevention devices. In addition, the company offers golf balls, golf clubs, and other sporting goods; bicycles, bicycle-related goods, and others; and finance and other services. It has operations in Japan, the Americas, Europe, Russia, the Middle East, India, Africa, China, Asia, Oceania, Oceania, and internationally. The company was incorporated in 1931 and is headquartered in Tokyo, Japan.