Head to Head Analysis: Denso (OTCMKTS:DNZOY) and Adient (NYSE:ADNT)

Denso (OTCMKTS:DNZOY) and Adient (NYSE:ADNT) are both auto/tires/trucks companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.

Profitability

This table compares Denso and Adient’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Denso	5.82%	8.14%	5.18%
Adient	0.39%	7.28%	1.67%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Denso and Adient, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denso	0	4	0	0	2.00
Adient	1	6	5	0	2.33

Adient has a consensus target price of $28.11, suggesting a potential upside of 37.81%. Given Adient’s stronger consensus rating and higher probable upside, analysts plainly believe Adient is more favorable than Denso.

Dividends

Denso pays an annual dividend of $0.26 per share and has a dividend yield of 2.2%. Adient pays an annual dividend of $1.10 per share and has a dividend yield of 5.4%. Denso pays out 24.3% of its earnings in the form of a dividend. Adient pays out 154.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Denso has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Adient has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500.

Earnings and Valuation

This table compares Denso and Adient”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Denso	$50.09 billion	0.70	$2.93 billion	$1.07	11.26
Adient	$14.94 billion	0.11	-$281.00 million	$0.71	28.73

Denso has higher revenue and earnings than Adient. Denso is trading at a lower price-to-earnings ratio than Adient, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

92.4% of Adient shares are held by institutional investors. 0.9% of Adient shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

About Denso

DENSO Corporation engages in the manufacture and sale of automotive parts in Japan, rest of Asia, North America, Europe, and internationally. The company offers air-conditioning systems, including thermal management heat pump system, heat pump air-conditioning systems, refrigerant products, personal heating and cooling devices, air quality system, heat exchangers, bus air-conditioning systems, automotive freezers, and cooling products, as well as heating, ventilation, and air-conditioning units. It also provides gasoline, diesel, hybrid, electric vehicle, and fuel cell vehicle power-train systems; and safety and cockpit systems, such as driving environment recognition, vehicle dynamic control, collision safety, visibility support, cockpit information, and information security systems, as well as other products. In addition, the company offers automotive service parts and accessories, comprising spark plugs, oil and cabin air filters, wiper blades, air filter elements, starters, alternators, compressors, oxygen sensors, fuel pumps, air conditioner service parts, radiators, condensers, ion generators, air conditioners for busses and construction vehicles, and truck refrigeration products, as well as refrigerant recovery, recycling, and charging machines; and repair and support products and services. Further, it provides industrial solutions for factories in automotive parts production; agricultural solutions, including Profarm Controller, a climate control system for greenhouse and horticulture solutions; and household air conditioning equipment and industrial systems. The company was incorporated in 1949 and is headquartered in Kariya, Japan.

About Adient

Adient plc engages in the design, development, manufacture, and market of seating systems and components for passenger cars, commercial vehicles, and light trucks. The company's automotive seating solutions include complete seating systems, frames, mechanisms, foams, head restraints, armrests, and trim covers. It serves automotive original equipment manufacturers in North America and South America; Europe, Middle East, and Africa; and the Asia Pacific/China. Adient plc was incorporated in 2016 and is based in Dublin, Ireland.