China Automotive Systems (NASDAQ:CAAS – Get Free Report) and Gentex (NASDAQ:GNTX – Get Free Report) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.
Volatility & Risk
China Automotive Systems has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Gentex has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.
Institutional and Insider Ownership
5.2% of China Automotive Systems shares are held by institutional investors. Comparatively, 86.8% of Gentex shares are held by institutional investors. 64.8% of China Automotive Systems shares are held by insiders. Comparatively, 0.6% of Gentex shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares China Automotive Systems and Gentex’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| China Automotive Systems | N/A | N/A | N/A |
| Gentex | 15.15% | 16.67% | 14.06% |
Analyst Recommendations
This is a summary of recent recommendations for China Automotive Systems and Gentex, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| China Automotive Systems | 0 | 0 | 1 | 0 | 3.00 |
| Gentex | 1 | 6 | 1 | 0 | 2.00 |
Gentex has a consensus target price of $23.08, suggesting a potential upside of 20.23%. Given Gentex’s higher probable upside, analysts clearly believe Gentex is more favorable than China Automotive Systems.
Valuation and Earnings
This table compares China Automotive Systems and Gentex”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| China Automotive Systems | $765.74 million | 0.18 | $42.84 million | $1.42 | 3.15 |
| Gentex | $2.53 billion | 1.56 | $384.84 million | $1.86 | 10.32 |
Gentex has higher revenue and earnings than China Automotive Systems. China Automotive Systems is trading at a lower price-to-earnings ratio than Gentex, indicating that it is currently the more affordable of the two stocks.
Summary
Gentex beats China Automotive Systems on 10 of the 13 factors compared between the two stocks.
About China Automotive Systems
China Automotive Systems, Inc. develops, manufactures and sells power steering systems and components for passenger vehicles and commercial vehicles. Its products include hydraulic and electric power steering systems, steering gears, pumps and steering columns. The company serves automakers and other customers in China and also sells products internationally. Its manufacturing and sales operations are conducted primarily through subsidiaries and joint ventures in China. Founded in 1999, China Automotive Systems is headquartered in Jingzhou, Hubei Province, China.
About Gentex
Gentex Corporation is a technology company headquartered in Zeeland, Michigan. It develops and manufactures products primarily for the global automotive industry, including automatic-dimming rearview and exterior mirrors, camera-based visibility systems, and other electronic features for vehicles. Its automotive offerings also include HomeLink, a vehicle-based wireless control system for compatible garage doors, gates, and home devices. Gentex supplies automakers around the world and works with customers to integrate its products into new vehicles.
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