Garrett Motion (NYSE:GTX) and American Axle & Manufacturing (NYSE:DCH) Critical Contrast

American Axle & Manufacturing (NYSE:DCH) and Garrett Motion (NYSE:GTX) are both auto/tires/trucks companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.

Earnings & Valuation

This table compares American Axle & Manufacturing and Garrett Motion”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Axle & Manufacturing	$5.84 billion	0.14	-$19.70 million	($0.18)	-38.78
Garrett Motion	$3.54 billion	1.04	$261.00 million	$1.57	12.04

Garrett Motion has lower revenue, but higher earnings than American Axle & Manufacturing. American Axle & Manufacturing is trading at a lower price-to-earnings ratio than Garrett Motion, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for American Axle & Manufacturing and Garrett Motion, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Axle & Manufacturing	1	1	3	0	2.40
Garrett Motion	0	2	4	0	2.67

American Axle & Manufacturing currently has a consensus price target of $12.45, suggesting a potential upside of 78.37%. Garrett Motion has a consensus price target of $18.80, suggesting a potential downside of 0.53%. Given American Axle & Manufacturing’s higher probable upside, equities analysts clearly believe American Axle & Manufacturing is more favorable than Garrett Motion.

Insider and Institutional Ownership

91.4% of American Axle & Manufacturing shares are held by institutional investors. Comparatively, 86.3% of Garrett Motion shares are held by institutional investors. 3.7% of American Axle & Manufacturing shares are held by insiders. Comparatively, 0.8% of Garrett Motion shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares American Axle & Manufacturing and Garrett Motion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Axle & Manufacturing	-0.34%	10.00%	1.17%
Garrett Motion	8.12%	-38.75%	12.39%

Volatility & Risk

American Axle & Manufacturing has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500. Comparatively, Garrett Motion has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500.

Summary

Garrett Motion beats American Axle & Manufacturing on 8 of the 14 factors compared between the two stocks.

About American Axle & Manufacturing

American Axle & Manufacturing Holdings, Inc. is a leading supplier of driveline and drivetrain systems, modules and components for the light vehicle market world wide. It manufactures Driveline and Metal Forming technologies to support electric, hybrid and internal combustion vehicles. It’s the primary supplier of driveline components to its major customers include General Motors, Stellantis and Ford. It also sells various products to Ford & Stellantis from Metal Forming segment. It has the 2 operating segments. Driveline segment comprises front & rear axles, driveshafts, differential assemblies, clutch modules, balance shaft systems, disconnecting driveline technology, and electric & hybrid driveline products and systems for light trucks, SUVs, crossover vehicles, passenger cars and commercial vehicles. Metal Forming segment comprises axle & transmission shafts, ring and pinion gears, differential gears & assemblies, connecting rods and variable valve timing products for OEM and Tier 1 automotive suppliers.

About Garrett Motion

Garrett Motion Inc., together with its subsidiaries, designs, manufactures, and sells turbocharging, air and fluid compression, and high-speed electric motor technologies for original equipment manufacturers and distributors worldwide. The company offers cutting-edge technology for the mobility and industrial space, including light vehicles, commercial vehicles, and industrial applications. In addition, it provides mechanical and electrical products for turbocharging and boosting internal combustion engines, as well as compressing air for fuel cell compressors, and compressing refrigerant for electric cooling compressors. The company offers its products in the aftermarket through distributors. Garrett Motion Inc. was incorporated in 2018 and is based in Rolle, Switzerland.