BorgWarner (NYSE: BWA) and Cooper-Standard Holdings (NYSE:CPS) are both auto/tires/trucks companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Valuation & Earnings

This table compares BorgWarner and Cooper-Standard Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BorgWarner $9.27 billion 1.12 $1.54 billion $0.89 55.25
Cooper-Standard Holdings $3.54 billion 0.54 $431.14 million $7.93 13.60

BorgWarner has higher revenue and earnings than Cooper-Standard Holdings. Cooper-Standard Holdings is trading at a lower price-to-earnings ratio than BorgWarner, indicating that it is currently the more affordable of the two stocks.

Dividends

BorgWarner pays an annual dividend of $0.56 per share and has a dividend yield of 1.1%. Cooper-Standard Holdings does not pay a dividend. BorgWarner pays out 62.9% of its earnings in the form of a dividend. Cooper-Standard Holdings has raised its dividend for 2 consecutive years.

Profitability

This table compares BorgWarner and Cooper-Standard Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BorgWarner 2.06% 20.75% 8.17%
Cooper-Standard Holdings 4.22% 26.90% 8.12%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for BorgWarner and Cooper-Standard Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BorgWarner 3 8 4 0 2.07
Cooper-Standard Holdings 1 1 2 0 2.25

BorgWarner currently has a consensus target price of $43.36, indicating a potential downside of 11.82%. Cooper-Standard Holdings has a consensus target price of $106.75, indicating a potential downside of 1.05%. Given Cooper-Standard Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe Cooper-Standard Holdings is more favorable than BorgWarner.

Insider & Institutional Ownership

91.1% of BorgWarner shares are owned by institutional investors. Comparatively, 95.8% of Cooper-Standard Holdings shares are owned by institutional investors. 0.7% of BorgWarner shares are owned by company insiders. Comparatively, 1.1% of Cooper-Standard Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

BorgWarner has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500. Comparatively, Cooper-Standard Holdings has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500.

Summary

Cooper-Standard Holdings beats BorgWarner on 9 of the 17 factors compared between the two stocks.

BorgWarner Company Profile

BorgWarner Inc. is engaged in providing technology solutions for combustion, hybrid and electric vehicles. The Company’s segments include Engine and Drivetrain. The Engine segment’s products include turbochargers, timing devices and chains, emissions systems and thermal systems. The Engine segment develops and manufactures products for gasoline and diesel engines, and alternative powertrains. The Drivetrain segment’s products include transmission components and systems, all-wheel drive (AWD) torque transfer systems and rotating electrical devices. The Company’s products are manufactured and sold across the world, primarily to original equipment manufacturers (OEMs) of light vehicles (passenger cars, sport-utility vehicles (SUVs), vans and light trucks). The Company’s products are also sold to other OEMs of commercial vehicles (medium-duty trucks, heavy-duty trucks and buses) and off-highway vehicles (agricultural and construction machinery and marine applications.

Cooper-Standard Holdings Company Profile

Cooper-Standard Holdings Inc. is a holding company. The Company designs, manufactures and sells sealing, fuel and brake delivery, fluid transfer and anti-vibration systems for use in passenger vehicles and light trucks manufactured by global original equipment manufacturers (OEMs). The Company operates through four segments: North America, Europe, Asia Pacific and South America. The Company’s products are used in passenger vehicles and light trucks. As of December 31, 2016, the Company’s operations were conducted through 123 leased and joint venture facilities in 20 countries (North America: Canada, Mexico and the United States; Asia Pacific: China, India, Japan, South Korea and Thailand; Europe: Czech Republic, France, Germany, Italy, the Netherlands, Poland, Romania, Serbia, Spain, Sweden and the United Kingdom, and South America: Brazil), of which 90 are manufacturing facilities and 33 have design, engineering, administrative or logistics designations.

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