Gentherm (NASDAQ:THRM) and China Automotive Systems (NASDAQ:CAAS) are both small-cap auto/tires/trucks companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, risk, profitability, valuation and dividends.

Volatility and Risk

Gentherm has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500. Comparatively, China Automotive Systems has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500.

Institutional and Insider Ownership

3.6% of China Automotive Systems shares are held by institutional investors. 3.1% of Gentherm shares are held by insiders. Comparatively, 62.2% of China Automotive Systems shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Gentherm and China Automotive Systems’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gentherm $985.68 million 1.45 $35.22 million $2.31 16.92
China Automotive Systems $499.06 million 0.20 -$19.34 million $0.64 4.72

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

Profitability

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

Net Margins Return on Equity Return on Assets
Gentherm 3.04% 11.97% 7.79%
China Automotive Systems -5.52% 3.39% 1.53%

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gentherm 1 4 6 0 2.45
China Automotive Systems 0 0 0 0 N/A

Gentherm presently has a consensus target price of $43.20, suggesting a potential upside of 10.54%. Given Gentherm’s higher possible upside, equities research analysts plainly believe Gentherm is more favorable than China Automotive Systems.

Summary

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

About Gentherm

Gentherm Incorporated designs, develops, and manufactures thermal management technologies in North America, Europe, and Asia. The company operates through two segments, Automotive and Industrial. The Automotive segment offers automotive seat comfort systems, including seat heaters, variable temperature climate control seats that are designed to provide individualized thermal comfort to automobile passengers; and integrated electronic components, such as blowers and electronic control units. This segment also provides specialized automotive cable system products, including ready-made wire harnesses and related wiring products; automotive steering wheel heaters, heated door and armrests, heated and cooled cup holders, and thermal storage bins; and non-automotive products comprising heated and cooled mattress and furniture. This segment serves light vehicle original equipment manufacturers (OEMs), commercial vehicle OEMs, and automotive seat manufacturers. The Industrial segment offers remote power generation systems, patient temperature management systems, and environmental testing equipment and services. The company was formerly known as Amerigon Incorporated and changed its name to Gentherm Incorporated in September 2012. Gentherm Incorporated was founded in 1968 and is headquartered in Northville, Michigan.

About China Automotive Systems

China Automotive Systems, Inc., through its subsidiaries, manufactures and sells automotive systems and components in the People's Republic of China. The company produces rack and pinion power steering gears for cars and light duty vehicles; integral power steering gears for heavy-duty vehicles; power steering parts for light duty vehicles; sensor modules; automobile steering systems and columns; and automobile electronic systems and parts. It is also involved in the marketing of automotive parts in North America and Brazil, as well as the provision of after sales, and research and development support services. The company primarily sells its products to the original equipment manufacturing customers. China Automotive Systems, Inc. was founded in 2003 and is headquartered in Jing Zhou, the People's Republic of China.

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