Motorcar Parts of America (NASDAQ: MPAA) and China XD Plastics Company Limited (NASDAQ:CXDC) are both small-cap auto/tires/trucks companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares Motorcar Parts of America and China XD Plastics Company Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Motorcar Parts of America 8.75% 16.77% 9.31%
China XD Plastics Company Limited 7.52% 16.31% 5.16%

Risk and Volatility

Motorcar Parts of America has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, China XD Plastics Company Limited has a beta of 2.46, meaning that its stock price is 146% more volatile than the S&P 500.

Institutional and Insider Ownership

11.4% of China XD Plastics Company Limited shares are owned by institutional investors. 4.4% of Motorcar Parts of America shares are owned by company insiders. Comparatively, 66.3% of China XD Plastics Company Limited shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Motorcar Parts of America and China XD Plastics Company Limited, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Motorcar Parts of America 0 0 3 0 3.00
China XD Plastics Company Limited 0 0 0 0 N/A

Motorcar Parts of America presently has a consensus price target of $36.33, suggesting a potential upside of 34.97%. Given Motorcar Parts of America’s higher probable upside, equities analysts clearly believe Motorcar Parts of America is more favorable than China XD Plastics Company Limited.

Valuation & Earnings

This table compares Motorcar Parts of America and China XD Plastics Company Limited’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Motorcar Parts of America $430.90 million 1.17 $77.60 million $1.93 13.95
China XD Plastics Company Limited $1.26 billion 0.18 $201.46 million $1.45 3.10

China XD Plastics Company Limited has higher revenue and earnings than Motorcar Parts of America. China XD Plastics Company Limited is trading at a lower price-to-earnings ratio than Motorcar Parts of America, indicating that it is currently the more affordable of the two stocks.

Summary

Motorcar Parts of America beats China XD Plastics Company Limited on 8 of the 13 factors compared between the two stocks.

Motorcar Parts of America Company Profile

Motorcar Parts of America, Inc. is a manufacturer, remanufacturer and distributor of automotive aftermarket parts, including alternators, starters, wheel hub assembly, brake master cylinders, brake power boosters and turbochargers utilized in imported and domestic passenger vehicles, light trucks and heavy-duty applications. The Company sells its products in North America to auto parts retail and traditional warehouse chains and to automobile manufacturers for both their aftermarket programs and their warranty replacement programs (OES). It recycles materials, including metal from the used cores and corrugated packaging. The Company carries over 13,000 stock keeping units (SKUs) for automotive parts that are sold under its customers’ recognized private label brand names and its Quality-Built, Pure Energy, Xtreme, Reliance and other brand names. It sells its products to automotive retail outlets and the professional repair market throughout the United States and Canada.

China XD Plastics Company Limited Company Profile

China XD Plastics Company Limited (China XD) is a specialty chemical company. The Company is engaged in the research, development, manufacture and sale of modified plastics for automotive applications in China and to a lesser extent, in Dubai, the United Arab Emirates (UAE). The Company operates in the modified plastics segment. Through its subsidiaries, Heilongjiang Xinda Enterprise Group Company Limited (HLJ Xinda Group) and AL Composites Materials FZE (Dubai Composites), the Company manufactures and sells polymer composite materials (including modified plastics), for automotive applications. The Company’s products categories include Modified Polypropylene (PP), Modified Acrylonitrile Butadiene Styrene (ABS), Modified Polyamide 66 (PA66), Modified Polyamide 6 (PA6), Modified Polyoxymethylenes (POM), Modified Polyphenylene Oxide (PPO), Plastic Alloy, Modified Polyphenylene Sulfide (PPS), Modified Polyimide (PI), Modified Polylactic Acid (PLA) and Poly Ether Ether Ketone (PEEK).

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