Head-To-Head Survey: Lear Corporation (LEA) and Tenneco (TEN)
Lear Corporation (NYSE: LEA) and Tenneco (NYSE:TEN) are both mid-cap auto/tires/trucks companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitabiliy, dividends, risk, earnings, analyst recommendations, valuation and institutional ownership.
Valuation & Earnings
This table compares Lear Corporation and Tenneco’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Lear Corporation||$19.29 billion||0.52||$1.97 billion||$15.06||9.69|
|Tenneco||$8.86 billion||0.33||$631.00 million||$5.07||10.65|
Lear Corporation has higher revenue and earnings than Tenneco. Lear Corporation is trading at a lower price-to-earnings ratio than Tenneco, indicating that it is currently the more affordable of the two stocks.
Lear Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 1.4%. Tenneco pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Lear Corporation pays out 13.3% of its earnings in the form of a dividend. Tenneco pays out 19.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Tenneco has raised its dividend for 6 consecutive years. Tenneco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Lear Corporation has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500. Comparatively, Tenneco has a beta of 1.79, meaning that its stock price is 79% more volatile than the S&P 500.
This is a breakdown of recent recommendations for Lear Corporation and Tenneco, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Lear Corporation currently has a consensus price target of $147.60, suggesting a potential upside of 1.10%. Tenneco has a consensus price target of $66.63, suggesting a potential upside of 23.38%. Given Tenneco’s stronger consensus rating and higher possible upside, analysts clearly believe Tenneco is more favorable than Lear Corporation.
Institutional & Insider Ownership
97.6% of Lear Corporation shares are owned by institutional investors. Comparatively, 96.5% of Tenneco shares are owned by institutional investors. 0.5% of Lear Corporation shares are owned by insiders. Comparatively, 2.7% of Tenneco shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares Lear Corporation and Tenneco’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Lear Corporation beats Tenneco on 9 of the 16 factors compared between the two stocks.
Lear Corporation Company Profile
Lear Corporation (Lear) is a supplier to the global automotive industry. The Company is engaged in supplying seating, electrical distribution systems and electronic modules, as well as related sub-systems, components and software, to automotive manufacturers. The Company’s segments include Seating and E-Systems. The Company serves the automotive and light truck market. The Seating segment consists of the design, development, engineering, just-in-time assembly and delivery of complete seat systems, as well as the design, development, engineering and manufacture of all seat components, including seat covers and surface materials, such as leather and fabric, seat structures and mechanisms, seat foam and headrests. The E-Systems segment consists of the design, development, engineering, manufacture, assembly and supply of electrical distribution systems, electronic modules and related components and software for light vehicles across the world.
Tenneco Company Profile
Tenneco Inc. is a producer of clean air and ride performance products and systems for light vehicle, commercial truck, off-highway and other vehicle applications. The Company designs, manufactures and distributes highly engineered products for both original equipment vehicle manufacturers (OEMs) and the repair and replacement markets, or aftermarket, across the world. The Company operates through six segments: North America Clean Air; North America Ride Performance; Europe, South America and India Clean Air; Europe, South America and India Ride Performance; Asia Pacific Clean Air, and Asia Pacific Ride Performance. The Company serves both original equipment (OE) vehicle designers and manufacturers and the repair and replacement markets, or aftermarket, globally through brands, including Monroe, Rancho, Clevite Elastomers, Axios, Kinetic and Fric-Rot ride performance products and Walker, XNOx, Fonos, DynoMax and Thrush clean air products.
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