Critical Survey: Continental (CTTAY) vs. Its Peers

Continental (OTCMKTS:CTTAY) is one of 148 public companies in the “Automobile Components” industry, but how does it weigh in compared to its peers? We will compare Continental to similar businesses based on the strength of its risk, analyst recommendations, valuation, dividends, institutional ownership, earnings and profitability.

Institutional and Insider Ownership

0.0% of Continental shares are owned by institutional investors. Comparatively, 48.4% of shares of all “Automobile Components” companies are owned by institutional investors. 19.6% of shares of all “Automobile Components” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Continental and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Continental	0	4	5	0	2.56
Continental Competitors	1091	4505	6141	203	2.46

As a group, “Automobile Components” companies have a potential upside of 61.63%. Given Continental’s peers higher probable upside, analysts plainly believe Continental has less favorable growth aspects than its peers.

Dividends

Continental pays an annual dividend of $0.21 per share and has a dividend yield of 2.6%. Continental pays out 48.8% of its earnings in the form of a dividend. As a group, “Automobile Components” companies pay a dividend yield of 11.0% and pay out 24.2% of their earnings in the form of a dividend. Continental lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Continental and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Continental	5.35%	18.14%	4.51%
Continental Competitors	-40.98%	-0.27%	-1.94%

Risk and Volatility

Continental has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Continental’s peers have a beta of 3.88, suggesting that their average share price is 288% more volatile than the S&P 500.

Earnings & Valuation

This table compares Continental and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Continental	$22.26 billion	-$186.68 million	19.05
Continental Competitors	$6.51 billion	$73.97 million	3.00

Continental has higher revenue, but lower earnings than its peers. Continental is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

Continental peers beat Continental on 8 of the 15 factors compared.

About Continental

Continental AG is a German manufacturing company founded in 1871 and headquartered in Hanover. It develops and produces tires and technology products for mobility and industrial applications, serving vehicle manufacturers, businesses and consumers around the world. Its tire business supplies products for passenger cars, commercial vehicles and specialty applications, including tires sold under the Continental and General Tire brands. Through ContiTech, the company also makes materials and components such as hoses, conveyor belts and air springs for transportation and industrial customers.