Reviewing XPEL (NASDAQ:XPEL) & BorgWarner (NYSE:BWA)

BorgWarner (NYSE:BWA) and XPEL (NASDAQ:XPEL) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Earnings and Valuation

This table compares BorgWarner and XPEL”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BorgWarner	$14.32 billion	0.87	$277.00 million	$2.00	30.71
XPEL	$508.09 million	2.38	$51.23 million	$1.97	22.23

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

Risk and Volatility

BorgWarner has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, XPEL has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for BorgWarner and XPEL, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BorgWarner	0	6	9	0	2.60
XPEL	0	2	1	1	2.75

BorgWarner presently has a consensus target price of $78.86, suggesting a potential upside of 28.41%. XPEL has a consensus target price of $65.00, suggesting a potential upside of 48.45%. Given XPEL’s stronger consensus rating and higher possible upside, analysts clearly believe XPEL is more favorable than BorgWarner.

Profitability

This table compares BorgWarner and XPEL’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BorgWarner	2.89%	19.10%	7.93%
XPEL	10.77%	18.98%	13.56%

Insider & Institutional Ownership

95.7% of BorgWarner shares are held by institutional investors. Comparatively, 75.1% of XPEL shares are held by institutional investors. 0.8% of BorgWarner shares are held by company insiders. Comparatively, 9.4% of XPEL shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

XPEL beats BorgWarner on 8 of the 15 factors compared between the two stocks.

About BorgWarner

BorgWarner Inc., together with its subsidiaries, provides solutions for combustion, hybrid, and electric vehicles worldwide. It offers turbochargers, eBoosters, eTurbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, cabin heaters, battery modules and systems, battery heaters, and battery charging. The company provides power electronics, control modules, software, friction, and mechanical products for automatic transmissions and torque-management products. It sells its products to original equipment manufacturers of light vehicles, which comprise passenger cars, sport-utility vehicles, vans, and light trucks; commercial vehicles, including medium-duty and heavy-duty trucks, and buses; and off-highway vehicles, such as agricultural and construction machinery, and marine applications, as well as to tier one vehicle systems suppliers and the aftermarket for light, commercial, and off-highway vehicles. The company was formerly known as Borg-Warner Automotive, Inc. BorgWarner Inc. was incorporated in 1987 and is headquartered in Auburn Hills, Michigan.

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.