Comparing ARB (OTCMKTS:ARBFF) and Martinrea International (OTCMKTS:MRETF)

Martinrea International (OTCMKTS:MRETF) and ARB (OTCMKTS:ARBFF) are both consumer cyclical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Profitability

This table compares Martinrea International and ARB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Martinrea International	N/A	N/A	N/A
ARB	N/A	N/A	N/A

Valuation and Earnings

This table compares Martinrea International and ARB’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Martinrea International	N/A	N/A	N/A	$0.09	89.37
ARB	N/A	N/A	N/A	$0.59	38.17

ARB is trading at a lower price-to-earnings ratio than Martinrea International, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Martinrea International and ARB, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Martinrea International	0	0	1	0	3.00
ARB	1	1	0	0	1.50

Martinrea International currently has a consensus price target of $17.00, suggesting a potential upside of 104.41%. Given Martinrea International’s stronger consensus rating and higher probable upside, analysts clearly believe Martinrea International is more favorable than ARB.

Institutional & Insider Ownership

35.7% of Martinrea International shares are held by institutional investors. Comparatively, 22.0% of ARB shares are held by institutional investors. 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.

Dividends

Martinrea International pays an annual dividend of $0.09 per share and has a dividend yield of 1.1%. ARB pays an annual dividend of $0.29 per share and has a dividend yield of 1.3%. Martinrea International pays out 96.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ARB pays out 48.6% of its earnings in the form of a dividend. ARB is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Martinrea International beats ARB on 5 of the 8 factors compared between the two stocks.

About Martinrea International

Martinrea International Inc. engages in the design, development, and manufacturing of engineered, value-added lightweight structures and propulsion systems worldwide. It offers lightweight structure products, including knuckles/control arms/links; subframes integral/fabricated products; complex assemblies; body structures; exterior trims; and trailer hitches. The company also provides engine blocks; transmission housings; graphene and nylon coated brake lines; fluid and thermal product, such as fuel filler pipes, brake lines, and thermal management components. In addition, the company offers flexible manufacturing products comprising front and rear suspension modules, front vertical corner modules, bus frame assemblies, structural parts and fabrications, and metallic tanks and reservoirs. The company was formerly known as Royal Laser Tech Corporation and changed its name to Martinrea International Inc. in June 2002. Martinrea International Inc. was incorporated in 1987 and is headquartered in Vaughan, Canada.

About ARB

ARB Corporation Limited engages in the design, manufacture, distribution, and sale of motor vehicle accessories and light metal engineering works. The company provides bull bars, side rails and steps, canopies, UTE lids and tub accessories, roof racks, cross bars and carriers, suspension systems, driving lights, air compressors and tire accessories, air lockers, winches, recovery equipment and points, under vehicle protection products, fuel tanks and storage, drawers and cargo solutions, slide kitchen, portable fridge freezers, tents, swags and awnings, camping and touring accessories, safari snorkels, dual battery and solar systems, interior protection, and general accessories, as well as rear protection, towing, and wheel carriers. It also offers LINX, a controller that declutters the dashboard and centralizes the command of vehicle accessories by replacing classic switches, gauges, and monitors with one sleek and smart driver interface; and UHF radios, GPS, and reversing cameras. The company serves stockists, vehicle dealers, and various fleet operators, as well as owns and license ARB branded store network. The company has operations in Australia, New Zealand, the United States, Thailand, the Middle East, Europe, and the United Kingdom. ARB Corporation Limited was founded in 1975 and is based in Kilsyth, Australia.