American Axle & Manufacturing Holdings (NYSE: AXL) and Briggs & Stratton Corporation (NYSE:BGG) are both small-cap auto/tires/trucks companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitabiliy, risk, earnings, dividends and institutional ownership.

Profitability

This table compares American Axle & Manufacturing Holdings and Briggs & Stratton Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Axle & Manufacturing Holdings 5.32% 42.42% 6.42%
Briggs & Stratton Corporation 2.33% 11.69% 3.79%

Risk and Volatility

American Axle & Manufacturing Holdings has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500. Comparatively, Briggs & Stratton Corporation has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Earnings and Valuation

This table compares American Axle & Manufacturing Holdings and Briggs & Stratton Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Axle & Manufacturing Holdings $4.76 billion 0.34 $815.70 million $2.95 4.98
Briggs & Stratton Corporation $1.81 billion 0.55 $134.42 million $0.96 24.40

American Axle & Manufacturing Holdings has higher revenue and earnings than Briggs & Stratton Corporation. American Axle & Manufacturing Holdings is trading at a lower price-to-earnings ratio than Briggs & Stratton Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for American Axle & Manufacturing Holdings and Briggs & Stratton Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Axle & Manufacturing Holdings 2 2 8 0 2.50
Briggs & Stratton Corporation 0 1 1 0 2.50

American Axle & Manufacturing Holdings presently has a consensus price target of $19.44, indicating a potential upside of 32.37%. Briggs & Stratton Corporation has a consensus price target of $23.50, indicating a potential upside of 0.34%. Given American Axle & Manufacturing Holdings’ higher probable upside, research analysts clearly believe American Axle & Manufacturing Holdings is more favorable than Briggs & Stratton Corporation.

Insider and Institutional Ownership

85.4% of Briggs & Stratton Corporation shares are held by institutional investors. 1.0% of American Axle & Manufacturing Holdings shares are held by insiders. Comparatively, 4.7% of Briggs & Stratton Corporation 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.

Dividends

Briggs & Stratton Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 2.4%. American Axle & Manufacturing Holdings does not pay a dividend. Briggs & Stratton Corporation pays out 58.3% of its earnings in the form of a dividend. American Axle & Manufacturing Holdings has increased its dividend for 5 consecutive years.

Summary

American Axle & Manufacturing Holdings beats Briggs & Stratton Corporation on 11 of the 16 factors compared between the two stocks.

About American Axle & Manufacturing Holdings

American Axle & Manufacturing Holdings, Inc. (AAM) manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, crossover vehicles, passenger cars and commercial vehicles. Its driveline and drivetrain systems include components that transfer power from the transmission and deliver it to the drive wheels. Its driveline, drivetrain and related products include axles, driveheads, chassis modules, driveshafts, power transfer units, transfer cases, chassis and steering components, transmission parts, electric drive systems and metal-formed products. The Company’s subsidiary, e-AAM Driveline Systems AB (e-AAM), engineers and develops battery electric and hybrid driveline systems to be commercialized for crossover vehicles and passenger cars. As of April 6, 2017, it operated in 17 countries and had approximately 90 manufacturing, engineering and business office facilities around the world.

About Briggs & Stratton Corporation

Briggs & Stratton Corporation is a producer of gasoline engines for outdoor power equipment. The Company designs, manufactures, markets, sells and services the various products for original equipment manufacturers (OEMs) around the world. It also markets and sells related service parts and accessories for its engines. Its subsidiary is a marketer of pressure washers, and it is a designer, manufacturer and marketer of power generation, lawn and garden, turf care and job site products through its Simplicity, Snapper, Snapper Pro, Ferris, PowerBoss, Allmand, Billy Goat, Murray, Branco and Victa brands. It operates in over 100 countries on six continents. It operates through two segments: Engines and Products. Its Engines segment sells engines around the world, primarily to OEMs of lawn and garden equipment and other gasoline engine-powered equipment. Its Products segment designs, manufactures and markets a range of outdoor power equipment, job site products and related accessories.

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