Critical Survey: Gentherm (NASDAQ:THRM) versus AB Volvo (OTCMKTS:VLVLY)

AB Volvo (OTCMKTS:VLVLY) and Gentherm (NASDAQ:THRM) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.

Insider & Institutional Ownership

0.0% of AB Volvo shares are owned by institutional investors. Comparatively, 97.1% of Gentherm shares are owned by institutional investors. 2.1% of Gentherm shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares AB Volvo and Gentherm”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AB Volvo	$48.98 billion	1.35	$3.52 billion	$2.04	15.89
Gentherm	$1.50 billion	1.03	$18.28 million	$0.30	98.44

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

Profitability

This table compares AB Volvo and Gentherm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AB Volvo	8.12%	21.50%	5.84%
Gentherm	0.57%	10.30%	5.05%

Risk and Volatility

AB Volvo has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, Gentherm has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for AB Volvo and Gentherm, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AB Volvo	2	6	0	2	2.20
Gentherm	2	3	5	0	2.30

Gentherm has a consensus price target of $43.57, suggesting a potential upside of 47.54%. Given Gentherm’s stronger consensus rating and higher probable upside, analysts clearly believe Gentherm is more favorable than AB Volvo.

Summary

AB Volvo beats Gentherm on 8 of the 15 factors compared between the two stocks.

About AB Volvo

AB Volvo, commonly known as the Volvo Group, is a Swedish manufacturer of commercial vehicles and industrial equipment. Founded in Gothenburg in 1927, the company operates separately from Volvo Cars. Its products include trucks, buses, construction equipment, and engines for marine and industrial applications. The group also provides aftermarket services, such as maintenance, repairs, and parts, as well as financing and other customer services. AB Volvo serves customers across markets worldwide through a network of manufacturing, sales, and service operations.

About Gentherm

Gentherm Inc. develops and manufactures thermal management technologies for the automotive and medical industries. Its automotive products help regulate temperature and comfort in vehicle interiors, including heated and ventilated seating, heated steering wheels, and other climate-control systems. The company also provides temperature-management products for healthcare, including systems used to warm or cool patients in clinical settings. Gentherm serves automotive manufacturers and healthcare customers in markets around the world.