Aptiv (NYSE:APTV) versus Denso (OTCMKTS:DNZOY) Critical Comparison

Aptiv (NYSE:APTV) and Denso (OTCMKTS:DNZOY) are both large-cap auto/tires/trucks companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Aptiv and Denso’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aptiv	1.46%	18.51%	7.38%
Denso	4.92%	6.84%	4.34%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Aptiv and Denso, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aptiv	0	7	14	4	2.88
Denso	1	2	0	0	1.67

Aptiv presently has a consensus price target of $96.63, indicating a potential upside of 25.91%. Given Aptiv’s stronger consensus rating and higher probable upside, equities analysts plainly believe Aptiv is more favorable than Denso.

Dividends

Aptiv pays an annual dividend of $0.88 per share and has a dividend yield of 1.1%. Denso pays an annual dividend of $0.24 per share and has a dividend yield of 1.8%. Aptiv pays out 69.8% of its earnings in the form of a dividend. Denso pays out 27.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Denso is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Aptiv has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500. Comparatively, Denso has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Institutional and Insider Ownership

94.2% of Aptiv shares are held by institutional investors. 0.5% of Aptiv shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Aptiv and Denso”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aptiv	$20.15 billion	0.82	$1.79 billion	$1.26	60.91
Denso	$47.03 billion	0.83	$2.77 billion	$0.86	15.60

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

Summary

Aptiv beats Denso on 11 of the 17 factors compared between the two stocks.

About Aptiv

Aptiv PLC engages in design, manufacture, and sale of vehicle components in North America, Europe, Middle East, Africa, the Asia Pacific, South America, and internationally. The company provides electrical, electronic, and safety technology solutions to the automotive and commercial vehicle markets. It operates through two segments, Signal and Power Solutions, and Advanced Safety and User Experience. The Signal and Power Solutions segment designs, manufactures, and assembles vehicle’s electrical architecture, including engineered component products, connectors, wiring assemblies and harnesses, cable management products, electrical centers, and hybrid high voltage and safety distribution systems. Its Advanced Safety and User Experience segment provides critical technologies and services for vehicle safety, security, comfort, and convenience, such as sensing and perception systems, electronic control units, multi-domain controllers, vehicle connectivity systems, application software, autonomous driving technologies, and end-to-end DevOps tools. The company was formerly known as Delphi Automotive PLC and changed its name to Aptiv PLC in December 2017. Aptiv PLC was incorporated in 2011 and is based in Dublin, Ireland.

About Denso

DENSO Corporation engages in the manufacture and sale of automotive parts in Japan, rest of Asia, North America, Europe, and internationally. The company offers air-conditioning systems, including thermal management heat pump system, heat pump air-conditioning systems, refrigerant products, personal heating and cooling devices, air quality system, heat exchangers, bus air-conditioning systems, automotive freezers, and cooling products, as well as heating, ventilation, and air-conditioning units. It also provides gasoline, diesel, hybrid, electric vehicle, and fuel cell vehicle power-train systems; and safety and cockpit systems, such as driving environment recognition, vehicle dynamic control, collision safety, visibility support, cockpit information, and information security systems, as well as other products. In addition, the company offers automotive service parts and accessories, comprising spark plugs, oil and cabin air filters, wiper blades, air filter elements, starters, alternators, compressors, oxygen sensors, fuel pumps, air conditioner service parts, radiators, condensers, ion generators, air conditioners for busses and construction vehicles, and truck refrigeration products, as well as refrigerant recovery, recycling, and charging machines; and repair and support products and services. Further, it provides industrial solutions for factories in automotive parts production; agricultural solutions, including Profarm Controller, a climate control system for greenhouse and horticulture solutions; and household air conditioning equipment and industrial systems. The company was incorporated in 1949 and is headquartered in Kariya, Japan.