Knorr-Bremse (OTCMKTS:KNRRY) and Adient (NYSE:ADNT) Financial Analysis

Adient (NYSE:ADNT) and Knorr-Bremse (OTCMKTS:KNRRY) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Volatility and Risk

Adient has a beta of 1.52, meaning that its share price is 52% more volatile than the S&P 500. Comparatively, Knorr-Bremse has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500.

Institutional and Insider Ownership

92.4% of Adient shares are owned by institutional investors. 0.9% of Adient shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Adient and Knorr-Bremse”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adient	$14.54 billion	0.09	-$281.00 million	$0.60	29.10
Knorr-Bremse	$8.84 billion	2.24	$604.17 million	$1.06	28.94

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

Profitability

This table compares Adient and Knorr-Bremse’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Adient	0.32%	7.32%	1.66%
Knorr-Bremse	7.37%	18.30%	6.53%

Analyst Ratings

This is a summary of current ratings for Adient and Knorr-Bremse, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adient	2	3	7	0	2.42
Knorr-Bremse	1	2	5	0	2.50

Adient presently has a consensus price target of $26.30, indicating a potential upside of 50.64%. Given Adient’s higher possible upside, analysts clearly believe Adient is more favorable than Knorr-Bremse.

Summary

Knorr-Bremse beats Adient on 8 of the 14 factors compared between the two stocks.

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.

About Knorr-Bremse

Knorr-Bremse AG, together with its subsidiaries, engages in the development, production, marketing, and servicing of braking and other systems for rail and commercial vehicles worldwide. The company operates in two segments, Rail Vehicle Systems and Commercial Vehicle Systems. The Rail Vehicle Systems segment offers braking systems, entrance and HVAC systems, sanitary systems, coupling systems, digital solutions, smart services for optimizing rail traffic, power electrics, rail computing and communication (RCC)/TCMS, signaling systems, stationary and mobile testing equipment, windshield wiper and wash systems, and extensive aftermarket solutions. The Commercial Vehicle Systems segment provides pneumatic braking systems comprising brake control systems, disk brakes, drum brakes, brake cylinders, valves, and pedal units; steering systems; vehicle dynamics solutions, such as anti-lock braking systems and electronic stability programs; driver assistance systems; automated driving and electronic leveling control; energy supply and distribution systems, including compressors and air treatment products; and engine components and transmission control systems, such as vibration dampers, engine air management, transmission control, and gear/clutch actuation products for trucks, buses, trailers, and agricultural machinery. In addition, it offers leasing, holding, logistics, and media and IT services. The company was founded in 1905 and is headquartered in Munich, Germany. Knorr-Bremse AG is a subsidiary of KB Holding GmbH.