Meritor (NYSE: MTOR) and Metaldyne Performance Group (NYSE:MPG) are both auto/tires/trucks companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, valuation, earnings and profitability.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Meritor and Metaldyne Performance Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Meritor 0 4 4 0 2.50
Metaldyne Performance Group 0 2 0 0 2.00

Meritor presently has a consensus price target of $25.44, suggesting a potential downside of 1.90%. Metaldyne Performance Group has a consensus price target of $17.50, suggesting a potential downside of 20.99%. Given Meritor’s stronger consensus rating and higher probable upside, research analysts plainly believe Meritor is more favorable than Metaldyne Performance Group.

Risk & Volatility

Meritor has a beta of 2.3, suggesting that its stock price is 130% more volatile than the S&P 500. Comparatively, Metaldyne Performance Group has a beta of 2.07, suggesting that its stock price is 107% more volatile than the S&P 500.

Insider and Institutional Ownership

93.2% of Meritor shares are owned by institutional investors. Comparatively, 18.6% of Metaldyne Performance Group shares are owned by institutional investors. 2.9% of Meritor shares are owned by company insiders. Comparatively, 5.1% of Metaldyne Performance Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Meritor and Metaldyne Performance Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Meritor $3.15 billion 0.73 $255.00 million $6.02 4.31
Metaldyne Performance Group N/A N/A N/A $1.44 15.38

Meritor has higher revenue and earnings than Metaldyne Performance Group. Meritor is trading at a lower price-to-earnings ratio than Metaldyne Performance Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Meritor and Metaldyne Performance Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Meritor 17.03% -106.67% 5.68%
Metaldyne Performance Group 2.60% 9.80% 2.11%

Dividends

Metaldyne Performance Group pays an annual dividend of $0.37 per share and has a dividend yield of 1.7%. Meritor does not pay a dividend. Metaldyne Performance Group pays out 25.7% of its earnings in the form of a dividend.

Summary

Meritor beats Metaldyne Performance Group on 10 of the 13 factors compared between the two stocks.

Meritor Company Profile

Meritor, Inc. is a supplier of a range of integrated systems, modules and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The Company’s segments include Commercial Truck & Industrial and Aftermarket & Trailer. The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, for medium- and heavy-duty trucks, off-highway, military, construction, bus and coach, fire and emergency and other applications in North America, South America, Europe and Asia Pacific. The Commercial Truck & Industrial segment also includes the Company’s aftermarket businesses in Asia Pacific and South America. The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement and remanufactured parts to commercial vehicle aftermarket customers in North America and Europe.

Metaldyne Performance Group Company Profile

Metaldyne Performance Group Inc. provides components for use in engine, transmission and driveline (Powertrain) and chassis, suspension, steering and brake component (Safety-Critical) Platforms for the global light, commercial and industrial vehicle markets. The Company produces these components using complex metal-forming manufacturing technologies and processes for a customer base of vehicle original equipment manufacturers and Tier I suppliers. The Company operates through three segments: HHI, Metaldyne and Grede. Its metal-forming manufacturing technologies and processes include Aluminum Die Casting, Forging, Iron Casting and Powder Metal Forming, as well as value-added manufacturing processes, such as Advanced Machining and Assembly. These technologies and processes are used to create a range of customized Powertrain and Safety-Critical components that address requirements for power density, power generation, power/torque transfer, strength and noise, vibration and harshness.

Receive News & Stock Ratings for Meritor Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Meritor Inc. and related stocks with our FREE daily email newsletter.