Head to Head Analysis: REE Automotive (NASDAQ:REE) vs. BorgWarner (NYSE:BWA)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BorgWarner	3.36%	19.61%	8.24%
REE Automotive	N/A	N/A	N/A

Volatility and Risk

BorgWarner has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, REE Automotive has a beta of 2.4, indicating that its stock price is 140% more volatile than the S&P 500.

Earnings and Valuation

This table compares BorgWarner and REE Automotive”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	0.74	$277.00 million	$2.35	22.00
REE Automotive	$1.30 million	1.87	-$55.81 million	($5.28)	-0.01

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

Insider & Institutional Ownership

95.7% of BorgWarner shares are held by institutional investors. Comparatively, 12.7% of REE Automotive shares are held by institutional investors. 0.8% of BorgWarner shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for BorgWarner and REE Automotive, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BorgWarner	0	3	11	0	2.79
REE Automotive	1	0	0	0	1.00

BorgWarner currently has a consensus price target of $79.33, suggesting a potential upside of 53.45%. Given BorgWarner’s stronger consensus rating and higher possible upside, equities analysts clearly believe BorgWarner is more favorable than REE Automotive.

Summary

BorgWarner beats REE Automotive on 12 of the 14 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 REE Automotive

REE Automotive Ltd. operates as an automotive technology company in France, the United Kingdom, the United States, and internationally. The company offers REEcorner, a compact module that integrates critical vehicle drive components comprising as steering, braking, suspension, powertrain, and control between the chassis and the wheel; and REEplatform that allows for the addition of a modular and customizable top hat/cabin design based on customer specifications, without requiring modification to the platform. It also provides P7-S Strip Chassis for commercial delivery vehicles and walk-in vans; P7-C Chassis Cab and Cutway Chassis, a class 4 chassis cab fully electric commercial truck for delivery and a range of vocational applications; and P7-B Box Truck, a class 3 box truck built on a P7 cab chassis with its all-wheel drive and all-wheel steer for vehicle control for better handling and safety in adverse conditions. It serves original equipment manufacturer, delivery and logistic fleets, dealers, e-commerce retailers, new mobility players, mobility-as-a-service providers, and autonomous drive companies. The company is headquartered in Herzliya, Israel.