BorgWarner (NYSE:BWA) and ISUZU MOTORS LT/ADR (OTCMKTS:ISUZY) are both mid-cap auto/tires/trucks companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.

Valuation & Earnings

This table compares BorgWarner and ISUZU MOTORS LT/ADR’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BorgWarner $10.53 billion 0.78 $930.70 million $4.48 8.93
ISUZU MOTORS LT/ADR $19.47 billion 0.44 $1.02 billion N/A N/A

ISUZU MOTORS LT/ADR has higher revenue and earnings than BorgWarner.

Profitability

This table compares BorgWarner and ISUZU MOTORS LT/ADR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BorgWarner 7.53% 20.13% 8.73%
ISUZU MOTORS LT/ADR 4.64% 9.57% 5.04%

Institutional and Insider Ownership

91.5% of BorgWarner shares are owned by institutional investors. Comparatively, 0.1% of ISUZU MOTORS LT/ADR shares are owned by institutional investors. 0.8% of BorgWarner shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

BorgWarner has a beta of 1.87, indicating that its stock price is 87% more volatile than the S&P 500. Comparatively, ISUZU MOTORS LT/ADR has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for BorgWarner and ISUZU MOTORS LT/ADR, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BorgWarner 0 7 11 0 2.61
ISUZU MOTORS LT/ADR 0 0 0 0 N/A

BorgWarner currently has a consensus target price of $47.00, suggesting a potential upside of 17.53%. Given BorgWarner’s higher probable upside, analysts clearly believe BorgWarner is more favorable than ISUZU MOTORS LT/ADR.

Dividends

BorgWarner pays an annual dividend of $0.68 per share and has a dividend yield of 1.7%. ISUZU MOTORS LT/ADR pays an annual dividend of $0.25 per share and has a dividend yield of 2.1%. BorgWarner pays out 15.2% of its earnings in the form of a dividend. BorgWarner has raised its dividend for 4 consecutive years.

Summary

BorgWarner beats ISUZU MOTORS LT/ADR on 11 of the 15 factors compared between the two stocks.

BorgWarner Company Profile

BorgWarner Inc. provides solutions for combustion, hybrid, and electric vehicles worldwide. It operates in two segments, Engine and Drivetrain. The Engine segment develops and manufactures turbochargers; eBoosters; and timing systems products, including timing chains, variable cam timing crankshaft and camshaft sprockets, tensioners, guides and snubbers, front-wheel drive transmission chains, four-wheel drive chains, and hybrid power transmission chains. It also provides emissions systems, such as electric air pumps and exhaust gas recirculation (EGR) modules, EGR coolers and valves, glow plugs, and instant starting systems; and thermal systems products comprising viscous fan drives, polymer fans, coolant pumps, cabin heaters, battery heaters, and battery charging and gasoline ignition technologies. The Drivetrain segment develops and manufactures friction and mechanical products that include dual and friction clutch modules, friction and separator plates, transmission bands, torque converter and one-way clutches, and torsional vibration dampers. It also provides electro-hydraulic solenoids, transmission solenoid modules, and dual clutch control modules; rear-wheel drive/all-wheel drive (AWD) transfer case systems, front wheel drive-AWD coupling systems, and cross-axle coupling systems; starters, alternators, and hybrid electric motors; and motor controllers, battery chargers, and uninterrupted power source systems. The company sells its products to original equipment manufacturers of light vehicles, which comprise passenger cars, sport-utility vehicles, vans, and light trucks; commercial vehicles, including medium-duty and heavy-duty trucks, and buses; and off-highway vehicles, such as agricultural and construction machinery, and marine applications, as well as to tier one vehicle systems suppliers and the aftermarket for light, commercial, and off-highway vehicles. BorgWarner Inc. was founded in 1987 and is headquartered in Auburn Hills, Michigan.

ISUZU MOTORS LT/ADR Company Profile

Isuzu Motors Limited manufactures and sells commercial vehicles, light commercial vehicles, and engine components worldwide. Its products include heavy and medium duty trucks and busses, and light-duty trucks; pickup trucks and sport utility vehicles; and marine and industrial engines. The company was formerly known as Diesel Automobile Industry Co., Ltd. and changed its name to Isuzu Motors Limited in July 1949. Isuzu Motors Limited was founded in 1916 and is headquartered in Tokyo, Japan.

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