Denso (OTCMKTS:DNZOY) versus Continental (OTCMKTS:CTTAY) Critical Survey

Continental (OTCMKTS:CTTAY) and Denso (OTCMKTS:DNZOY) are both large-cap auto/tires/trucks companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Dividends

Continental pays an annual dividend of $0.20 per share and has a dividend yield of 2.5%. Denso pays an annual dividend of $0.24 per share and has a dividend yield of 1.8%. Continental pays out 125.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Denso pays out 27.9% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Continental and Denso”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Continental	$42.98 billion	N/A	$1.26 billion	$0.16	50.81
Denso	$47.03 billion	0.84	$2.77 billion	$0.86	15.84

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

Risk & Volatility

Continental has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500. Comparatively, Denso has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Continental and Denso, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Continental	0	4	3	1	2.63
Denso	1	3	0	0	1.75

Profitability

This table compares Continental and Denso’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Continental	0.91%	1.14%	0.34%
Denso	4.92%	6.84%	4.34%

Insider & Institutional Ownership

0.0% of Continental shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

About Continental

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.

About Denso

DENSO Corporation engages in the manufacture and sale of automotive parts in Japan, rest of Asia, North America, Europe, and internationally. The company offers air-conditioning systems, including thermal management heat pump system, heat pump air-conditioning systems, refrigerant products, personal heating and cooling devices, air quality system, heat exchangers, bus air-conditioning systems, automotive freezers, and cooling products, as well as heating, ventilation, and air-conditioning units. It also provides gasoline, diesel, hybrid, electric vehicle, and fuel cell vehicle power-train systems; and safety and cockpit systems, such as driving environment recognition, vehicle dynamic control, collision safety, visibility support, cockpit information, and information security systems, as well as other products. In addition, the company offers automotive service parts and accessories, comprising spark plugs, oil and cabin air filters, wiper blades, air filter elements, starters, alternators, compressors, oxygen sensors, fuel pumps, air conditioner service parts, radiators, condensers, ion generators, air conditioners for busses and construction vehicles, and truck refrigeration products, as well as refrigerant recovery, recycling, and charging machines; and repair and support products and services. Further, it provides industrial solutions for factories in automotive parts production; agricultural solutions, including Profarm Controller, a climate control system for greenhouse and horticulture solutions; and household air conditioning equipment and industrial systems. The company was incorporated in 1949 and is headquartered in Kariya, Japan.