Critical Review: XPEL (NASDAQ:XPEL) & Standard Motor Products (NYSE:SMP)

Standard Motor Products (NYSE:SMP) and XPEL (NASDAQ:XPEL) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Volatility and Risk

Standard Motor Products has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, XPEL has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.

Earnings and Valuation

This table compares Standard Motor Products and XPEL”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Standard Motor Products	$1.79 billion	0.46	$41.33 million	$2.24	16.58
XPEL	$476.20 million	2.56	$51.23 million	$1.97	22.49

XPEL has lower revenue, but higher earnings than Standard Motor Products. Standard Motor Products is trading at a lower price-to-earnings ratio than XPEL, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Standard Motor Products and XPEL’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Standard Motor Products	2.78%	13.28%	4.62%
XPEL	10.77%	18.98%	13.56%

Insider and Institutional Ownership

81.3% of Standard Motor Products shares are held by institutional investors. Comparatively, 75.1% of XPEL shares are held by institutional investors. 5.5% of Standard Motor Products shares are held by company insiders. Comparatively, 9.4% of XPEL shares are held by company 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.

Analyst Ratings

This is a summary of current ratings and recommmendations for Standard Motor Products and XPEL, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Standard Motor Products	0	1	2	0	2.67
XPEL	0	2	1	1	2.75

Standard Motor Products currently has a consensus price target of $54.00, suggesting a potential upside of 45.41%. XPEL has a consensus price target of $65.00, suggesting a potential upside of 46.73%. Given XPEL’s stronger consensus rating and higher probable upside, analysts plainly believe XPEL is more favorable than Standard Motor Products.

Summary

XPEL beats Standard Motor Products on 11 of the 15 factors compared between the two stocks.

About Standard Motor Products

Standard Motor Products, Inc. manufactures and distributes replacement automotive parts in the United States and internationally. The company operates through three segments: Vehicle Control, Temperature Control, and Engineered Solutions segments. The company provides components for the ignition, emissions, and fuel delivery systems, such as air injection and induction components, air management valves, regulators and solenoids, exhaust gas recirculation components, fuel injectors and related components, fuel valves, ignition coils, connectors and sockets, modules, pumps, relays and fuses, starting and charging system parts, and vapor and purge components. It also offers electrical switches and actuators; chassis and drivetrain sensors, such as anti-lock brake and vehicle speed sensors; fluid level sensors; pressure sensors comprising tire pressure monitoring; temperature sensors; sensors for advanced driver assistance systems; battery cables, pigtails, and sockets, as well as various electrical wire, terminals, connectors, and tools for servicing a vehicle’s electrical system; and spark plug, coil on plug boots, and ignition system accessories. In addition, the company offers AC system components that include compressors, air conditioning repair kits, connecting lines, heat exchangers, and expansion devices; parts that provide engine, transmission, electric drive motor, and battery temperature management; thermal management products, sensors, switches, power distribution, electrification and electronics, injections and fuel delivery, ignition and emissions, and clamping devices for commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics, and lawn and garden sectors. It serves retailers and distributors, original equipment manufacturers and their suppliers, system integrators, and original equipment service part manufacturers. The company was founded in 1919 and is headquartered in Long Island City, New York.

About XPEL

XPEL, Inc. sells, distributes, and installs protective films and coatings worldwide. The company offers automotive surface and paint protection film, headlight protection, and automotive and architectural window films, as well as proprietary DAP software. It also provides pre-cut film products, merchandise and apparel, ceramic coatings, and tools and accessories. In addition, the company offers paint protection kits, car wash products, after-care products, and installation tools through its website. The company sells and distributes its products through independent installers, new car dealerships, third-party distributors, automobile original equipment manufacturers, and company-owned installation centers, as well as through franchisees and online channels. The company serves in the United States, China, Canada, Continental Europe, the United Kingdom, Asia Pacific, Latin America, the Middle East/Africa, and internationally. XPEL, Inc. was founded in 1997 and is headquartered in San Antonio, Texas.