Clean Diesel Technologies (NASDAQ: CDTI) and American Axle & Manufacturing Holdings (NYSE:AXL) are both small-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.

Insider and Institutional Ownership

1.3% of Clean Diesel Technologies shares are owned by institutional investors. 5.3% of Clean Diesel Technologies shares are owned by company insiders. Comparatively, 1.0% of American Axle & Manufacturing Holdings shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Clean Diesel Technologies and American Axle & Manufacturing Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Clean Diesel Technologies -72.31% -116.29% -34.01%
American Axle & Manufacturing Holdings 5.32% 42.42% 6.42%

Earnings and Valuation

This table compares Clean Diesel Technologies and American Axle & Manufacturing Holdings’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Clean Diesel Technologies $35.30 million 0.95 -$6.06 million ($3.36) -0.63
American Axle & Manufacturing Holdings $4.76 billion 0.35 $815.70 million $2.95 5.07

American Axle & Manufacturing Holdings has higher revenue and earnings than Clean Diesel Technologies. Clean Diesel Technologies is trading at a lower price-to-earnings ratio than American Axle & Manufacturing Holdings, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings for Clean Diesel Technologies and American Axle & Manufacturing Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Clean Diesel Technologies 0 1 2 0 2.67
American Axle & Manufacturing Holdings 2 2 8 0 2.50

Clean Diesel Technologies currently has a consensus price target of $4.00, indicating a potential upside of 87.79%. American Axle & Manufacturing Holdings has a consensus price target of $19.44, indicating a potential upside of 29.98%. Given Clean Diesel Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe Clean Diesel Technologies is more favorable than American Axle & Manufacturing Holdings.

Risk and Volatility

Clean Diesel Technologies has a beta of 2.84, meaning that its stock price is 184% more volatile than the S&P 500. Comparatively, American Axle & Manufacturing Holdings has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

Summary

American Axle & Manufacturing Holdings beats Clean Diesel Technologies on 7 of the 13 factors compared between the two stocks.

About Clean Diesel Technologies

Clean Diesel Technologies, Inc. commercializes its material technology by manufacturing and distributing light duty vehicle catalysts, and heavy duty diesel emissions control systems and products to automakers, distributors, integrators and retrofitters. The Company operates through two business division segments: Catalyst, which develops and produces catalysts to reduce emissions from gasoline, diesel and natural gas combustion engines, and Heavy Duty Diesel Systems, which designs and manufactures verified exhaust emissions control solutions for a range of heavy duty diesel applications. It develops materials incorporating various base metals that replace platinum group metals (PGM) and rare earth metals in coatings on vehicle catalytic converters. Its technologies include Spinel, base-metal activated rhodium on Support, mixed phase catalyst, synergized PGM diesel oxidation catalyst (SPGM DOC), Platinum Plus, ARIS, and Exhaust Gas Recirculation and Selective Catalytic Reduction.

About American Axle & Manufacturing Holdings

American Axle & Manufacturing Holdings, Inc. (AAM) manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, crossover vehicles, passenger cars and commercial vehicles. Its driveline and drivetrain systems include components that transfer power from the transmission and deliver it to the drive wheels. Its driveline, drivetrain and related products include axles, driveheads, chassis modules, driveshafts, power transfer units, transfer cases, chassis and steering components, transmission parts, electric drive systems and metal-formed products. The Company’s subsidiary, e-AAM Driveline Systems AB (e-AAM), engineers and develops battery electric and hybrid driveline systems to be commercialized for crossover vehicles and passenger cars. As of April 6, 2017, it operated in 17 countries and had approximately 90 manufacturing, engineering and business office facilities around the world.

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