Reviewing Strattec Security (NASDAQ:STRT) & Ferrari (NYSE:RACE)

Ferrari (NYSE:RACE) and Strattec Security (NASDAQ:STRT) are both auto/tires/trucks companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.

Risk and Volatility

Ferrari has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, Strattec Security has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500.

Profitability

This table compares Ferrari and Strattec Security’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ferrari	22.36%	43.40%	16.65%
Strattec Security	4.63%	12.33%	7.89%

Institutional & Insider Ownership

68.9% of Strattec Security shares are held by institutional investors. 3.9% of Strattec Security shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Ferrari and Strattec Security”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferrari	$8.08 billion	10.20	$1.81 billion	$10.11	34.85
Strattec Security	$565.07 million	0.61	$18.68 million	$6.60	12.45

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

Analyst Recommendations

This is a summary of current ratings and price targets for Ferrari and Strattec Security, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferrari	0	5	8	3	2.88
Strattec Security	0	1	1	1	3.00

Ferrari presently has a consensus price target of $469.06, indicating a potential upside of 33.12%. Given Ferrari’s higher probable upside, research analysts plainly believe Ferrari is more favorable than Strattec Security.

Summary

Ferrari beats Strattec Security on 11 of the 15 factors compared between the two stocks.

About Ferrari

Ferrari N.V., through its subsidiaries, engages in design, engineering, production, and sale of luxury performance sports cars worldwide. The company offers range, special series, Icona, and supercars; limited edition supercars and one-off cars; and track cars. It also provides racing cars, and spare parts and engines, as well as after sales, repair, maintenance, and restoration services for cars; and licenses its Ferrari brand to various producers and retailers of luxury and lifestyle goods. In addition, the company operates Ferrari museums in Modena and Maranello; Il Cavallino restaurant in Maranello; and theme parks in Abu Dhabi and Spain. Further, it provides direct or indirect finance and leasing services to retail clients and dealers; manages racetracks; develops and sells a range of apparel and accessories; and operates franchised and owned Ferrari stores. The company also sells its products through a network of authorized dealers operating points of sale, as well as through its website. The company was founded in 1947 and is headquartered in Maranello, Italy.

About Strattec Security

Strattec Security Corporation designs, develops, manufactures, and markets automotive access control products under the VAST Automotive Group brand primarily in North America. The company provides mechanical and electronically enhanced locks and keys, passive entry passive start systems, steering column and instrument panel ignition lock housings, latches, power sliding side door systems, power tailgate and lift gate systems, power deck lid systems, door handles, and related products. It also offers full service and aftermarket support services for its products. The company markets its products to automotive and light truck original equipment manufacturers, as well as other transportation-related manufacturers; and through wholesale distributors, other marketers, and users of component parts, as well as certain products to non-automotive commercial customers. It also exports its products to Europe, South America, Korea, China, and India. Strattec Security Corporation was founded in 1908 and is headquartered in Milwaukee, Wisconsin.