Comparing Denso (OTCMKTS:DNZOY) and Stoneridge (NYSE:SRI)

Denso (OTCMKTS:DNZOY) and Stoneridge (NYSE:SRI) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Denso	5.59%	7.85%	4.96%
Stoneridge	-15.64%	-24.91%	-8.33%

Institutional and Insider Ownership

98.1% of Stoneridge shares are owned by institutional investors. 11.0% of Stoneridge shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Denso	$50.09 billion	0.73	$2.93 billion	$1.03	12.17
Stoneridge	$861.26 million	0.24	-$102.83 million	($4.26)	-1.69

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

Analyst Ratings

This is a summary of recent ratings and target prices for Denso and Stoneridge, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denso	1	2	0	0	1.67
Stoneridge	1	2	0	0	1.67

Stoneridge has a consensus target price of $16.00, indicating a potential upside of 122.07%. Given Stoneridge’s higher possible upside, analysts plainly believe Stoneridge is more favorable than Denso.

Volatility & Risk

Denso has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Stoneridge has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500.

Summary

Denso beats Stoneridge on 8 of the 12 factors compared between the two stocks.

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.

About Stoneridge

Stoneridge, Inc., together with its subsidiaries, designs and manufactures engineered electrical and electronic systems, components, and modules for the automotive, commercial, off-highway, motorcycle, and agricultural vehicle markets in North America, South America, Europe, and internationally. The company operates through three segments: Control Devices, Electronics, and Stoneridge Brazil. The Control Devices segment offers actuators, sensors, switches, actuators, and connectors that monitor, measure, or activate specific functions within a vehicle. The Electronics segment designs and manufactures driver information systems, vision and safety systems, connectivity and compliance products, and electronic control units. Its products collect, store, and display vehicle information, such as speed, pressure, maintenance data, trip information, operator performance, temperature, distance traveled, and driver messages related to vehicle performance. This segment also offers electronic control units that regulate, coordinate, monitor, and direct the operation of the electrical system within a vehicle. The Stoneridge Brazil segment designs, manufactures, and sells vehicle tracking devices and monitoring services; vehicle security alarms and convenience accessories, including parking sensors and rearview cameras; in-vehicle audio and infotainment devices; and driver information systems and telematics solutions. The company provides its products and systems to various original equipment manufacturers and tier 1 customers, as well as aftermarket distributors. Stoneridge, Inc. was founded in 1965 and is headquartered in Novi, Michigan.