China Yuchai International (NYSE: BC) and Brunswick (NYSE:BC) are both auto/tires/trucks companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for China Yuchai International and Brunswick, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Yuchai International 0 0 1 0 3.00
Brunswick 0 2 12 0 2.86

China Yuchai International presently has a consensus target price of $28.00, suggesting a potential upside of 42.42%. Brunswick has a consensus target price of $74.75, suggesting a potential upside of 12.71%. Given China Yuchai International’s stronger consensus rating and higher probable upside, research analysts clearly believe China Yuchai International is more favorable than Brunswick.

Volatility & Risk

China Yuchai International has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Brunswick has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500.

Institutional and Insider Ownership

27.1% of China Yuchai International shares are held by institutional investors. Comparatively, 96.3% of Brunswick shares are held by institutional investors. 1.0% of Brunswick shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares China Yuchai International and Brunswick’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Yuchai International $2.48 billion 0.32 $150.71 million $3.09 6.36
Brunswick $4.51 billion 1.28 $146.40 million $3.89 17.05

China Yuchai International has higher earnings, but lower revenue than Brunswick. China Yuchai International is trading at a lower price-to-earnings ratio than Brunswick, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares China Yuchai International and Brunswick’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Yuchai International 5.90% 27.31% 14.27%
Brunswick 2.38% 24.14% 10.72%

Dividends

China Yuchai International pays an annual dividend of $0.73 per share and has a dividend yield of 3.7%. Brunswick pays an annual dividend of $0.76 per share and has a dividend yield of 1.1%. China Yuchai International pays out 23.6% of its earnings in the form of a dividend. Brunswick pays out 19.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Brunswick has raised its dividend for 5 consecutive years.

Summary

Brunswick beats China Yuchai International on 10 of the 17 factors compared between the two stocks.

About China Yuchai International

China Yuchai International Limited, through its subsidiaries, manufactures and sells diesel and natural gas engines in the People's Republic of China and internationally. It operates in two segments, Yuchai and HLGE. The company provides diesel and natural gas engines for light trucks, medium and heavy-duty trucks, buses and passenger vehicles, and marine and industrial applications; and generator sets. It also manufactures diesel engines for construction and agriculture applications, as well as supplies after-market parts and services. In addition, it engages in hospitality and property development activities. The company distributes its engines directly to auto original equipment manufacturers and retailers, as well as provides maintenance and retrofitting services. China Yuchai International Limited was founded in 1951 and is based in Singapore.

About Brunswick

Brunswick Corporation designs, manufactures, and markets recreation products worldwide. The company's Marine Engine segment offers outboard, sterndrive, and inboard engine and propulsion systems; marine electronics and control integration systems, steering systems, instruments, controls, propellers, trolling motors, fuel systems, service parts, and lubricants; and diesel propulsion systems to the recreational and commercial marine markets. It serves independent boat builders and governments through marine dealers and distributors, specialty marine retailers, and marine service centers under the Mercury, Mercury MerCruiser, Mariner, Mercury Racing, Mercury Diesel, Quicksilver, Mercury Precision Parts, Mercury Propellers, Attwood, Garelick, Whale, BLA, FulTyme RV, Talamex, Besto, Seachoice, and MotorGuide brands. The company's Boat segment offers boats, such as fiberglass pleasure, sport cruisers, sport fishing and center-console, offshore fishing, aluminum and fiberglass fishing, pontoon, utility, deck, inflatable, and heavy-gauge aluminum under the Bayliner, Heyday, Boston Whaler, Lund, Crestliner, Cypress Cay, Harris, Lowe, Princecraft, and Thunder Jet brands. This segment serves commercial and government customers through dealers and distributors. Its Fitness segment offers cardiovascular fitness equipment and strength-training equipment under the Life Fitness, Hammer Strength, Cybex, Indoor Cycling Group, and SCIFIT brands. This segment also offers billiards, table tennis, and air hockey tables, as well as game room furniture and related accessories under the Brunswick and Contender brands. This segment serves health clubs, corporations, schools and universities, hotels, professional sports teams, retirement and assisted living facilities, and the military and governmental agencies through dealers, distributors, specialty retailers, mass merchants, sporting goods stores, and its website. The company was founded in 1845 and is headquartered in Mettawa, Illinois.

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