Gentherm (THRM) versus Lear Corporation (LEA) Critical Analysis
Gentherm (NASDAQ: THRM) and Lear Corporation (NYSE:LEA) are both auto/tires/trucks companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.
Earnings & Valuation
This table compares Gentherm and Lear Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Gentherm||$961.81 million||1.15||$157.43 million||$2.18||13.81|
|Lear Corporation||$19.29 billion||0.50||$1.97 billion||$15.06||9.45|
Lear Corporation has higher revenue and earnings than Gentherm. Lear Corporation is trading at a lower price-to-earnings ratio than Gentherm, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Gentherm has a beta of 1.93, indicating that its stock price is 93% more volatile than the S&P 500. Comparatively, Lear Corporation has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500.
This table compares Gentherm and Lear Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current recommendations and price targets for Gentherm and Lear Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Gentherm presently has a consensus price target of $40.43, indicating a potential upside of 34.31%. Lear Corporation has a consensus price target of $147.60, indicating a potential upside of 3.72%. Given Gentherm’s stronger consensus rating and higher possible upside, equities analysts clearly believe Gentherm is more favorable than Lear Corporation.
Insider & Institutional Ownership
98.2% of Gentherm shares are owned by institutional investors. Comparatively, 96.6% of Lear Corporation shares are owned by institutional investors. 2.3% of Gentherm shares are owned by company insiders. Comparatively, 0.5% of Lear Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Lear Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 1.4%. Gentherm does not pay a dividend. Lear Corporation pays out 13.3% of its earnings in the form of a dividend. Gentherm has raised its dividend for 6 consecutive years.
Gentherm beats Lear Corporation on 10 of the 16 factors compared between the two stocks.
Gentherm Incorporated (Gentherm) is a global technology company engaged in the design, development, and manufacturing of thermal management technologies. The Company has two segments: Automotive and Industrial. Its products provide solutions for automotive passenger comfort and convenience, battery thermal management, remote power generation, patient temperature management, environmental product testing and other consumer and industrial temperature control needs. Its automotive products can be found on the vehicles of all major automotive manufacturers operating in North America, Europe and Asia. The Automotive segment comprises the results from its global automotive businesses and individual convenience products. The Industrial segment represents the combined results from its remote power generation systems business, patient temperature management systems business, environmental testing equipment and services business, and advanced research and product development division.
About Lear Corporation
Lear Corporation (Lear) is a supplier to the global automotive industry. The Company is engaged in supplying seating, electrical distribution systems and electronic modules, as well as related sub-systems, components and software, to automotive manufacturers. The Company’s segments include Seating and E-Systems. The Company serves the automotive and light truck market. The Seating segment consists of the design, development, engineering, just-in-time assembly and delivery of complete seat systems, as well as the design, development, engineering and manufacture of all seat components, including seat covers and surface materials, such as leather and fabric, seat structures and mechanisms, seat foam and headrests. The E-Systems segment consists of the design, development, engineering, manufacture, assembly and supply of electrical distribution systems, electronic modules and related components and software for light vehicles across the world.
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