Head-To-Head Analysis: China Automotive Systems (NASDAQ:CAAS) and Gentex (NASDAQ:GNTX)

China Automotive Systems (NASDAQ:CAAS) and Gentex (NASDAQ:GNTX) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

5.2% of China Automotive Systems shares are owned by institutional investors. Comparatively, 86.8% of Gentex shares are owned by institutional investors. 64.8% of China Automotive Systems shares are owned by company insiders. Comparatively, 0.6% of Gentex shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for China Automotive Systems and Gentex, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Automotive Systems	0	0	1	0	3.00
Gentex	1	6	1	0	2.00

Gentex has a consensus target price of $23.08, suggesting a potential upside of 20.23%. Given Gentex’s higher possible upside, analysts plainly believe Gentex is more favorable than China Automotive Systems.

Risk & Volatility

China Automotive Systems has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, Gentex has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500.

Profitability

This table compares China Automotive Systems and Gentex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Automotive Systems	N/A	N/A	N/A
Gentex	15.15%	16.67%	14.06%

Valuation & Earnings

This table compares China Automotive Systems and Gentex”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Automotive Systems	$765.74 million	0.18	$42.84 million	$1.42	3.15
Gentex	$2.53 billion	1.56	$384.84 million	$1.86	10.32

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

Summary

Gentex beats China Automotive Systems on 10 of the 13 factors compared between the two stocks.

About China Automotive Systems

China Automotive Systems, Inc. develops, manufactures and sells power steering systems and components for passenger vehicles and commercial vehicles. Its products include hydraulic and electric power steering systems, steering gears, pumps and steering columns. The company serves automakers and other customers in China and also sells products internationally. Its manufacturing and sales operations are conducted primarily through subsidiaries and joint ventures in China. Founded in 1999, China Automotive Systems is headquartered in Jingzhou, Hubei Province, China.

About Gentex

Gentex Corporation is a technology company headquartered in Zeeland, Michigan. It develops and manufactures products primarily for the global automotive industry, including automatic-dimming rearview and exterior mirrors, camera-based visibility systems, and other electronic features for vehicles. Its automotive offerings also include HomeLink, a vehicle-based wireless control system for compatible garage doors, gates, and home devices. Gentex supplies automakers around the world and works with customers to integrate its products into new vehicles.