Cooper-Standard Holdings (NYSE: CPS) 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 earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Dividends

Lear Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 1.2%. Cooper-Standard Holdings does not pay a dividend. Lear Corporation pays out 13.3% of its earnings in the form of a dividend. Cooper-Standard Holdings has increased its dividend for 6 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Cooper-Standard Holdings 4.22% 26.90% 8.12%
Lear Corporation 5.51% 32.34% 10.51%

Analyst Ratings

This is a breakdown of current ratings for Cooper-Standard Holdings and Lear Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cooper-Standard Holdings 1 1 2 0 2.25
Lear Corporation 3 3 5 0 2.18

Cooper-Standard Holdings currently has a consensus price target of $106.75, suggesting a potential downside of 0.86%. Lear Corporation has a consensus price target of $152.09, suggesting a potential downside of 8.80%. Given Cooper-Standard Holdings’ stronger consensus rating and higher probable upside, equities analysts clearly believe Cooper-Standard Holdings is more favorable than Lear Corporation.

Insider & Institutional Ownership

95.8% of Cooper-Standard Holdings shares are owned by institutional investors. Comparatively, 94.3% of Lear Corporation shares are owned by institutional investors. 1.1% of Cooper-Standard Holdings 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, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Cooper-Standard Holdings and Lear Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cooper-Standard Holdings $3.54 billion 0.54 $431.14 million $7.93 13.58
Lear Corporation $19.29 billion 0.59 $1.97 billion $15.06 11.07

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

Volatility and Risk

Cooper-Standard Holdings has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, Lear Corporation has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Summary

Lear Corporation beats Cooper-Standard Holdings on 11 of the 17 factors compared between the two stocks.

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.

Lear Corporation Company Profile

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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