Contrasting Denso (OTCMKTS:DNZOY) and Gentherm (NASDAQ:THRM)

Denso (OTCMKTS:DNZOY) and Gentherm (NASDAQ:THRM) are both auto/tires/trucks companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, dividends, risk, profitability and institutional ownership.

Earnings & Valuation

This table compares Denso and Gentherm”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Denso	$50.09 billion	0.67	$2.95 billion	$1.07	10.79
Gentherm	$1.50 billion	0.70	$18.28 million	$0.75	45.48

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

Insider & Institutional Ownership

97.1% of Gentherm shares are owned by institutional investors. 2.1% of Gentherm shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Denso and Gentherm, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denso	0	4	0	0	2.00
Gentherm	0	5	2	0	2.29

Gentherm has a consensus price target of $37.40, suggesting a potential upside of 9.65%. Given Gentherm’s stronger consensus rating and higher probable upside, analysts plainly believe Gentherm is more favorable than Denso.

Risk & Volatility

Denso has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Gentherm has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Profitability

This table compares Denso and Gentherm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Denso	5.82%	8.29%	5.23%
Gentherm	1.47%	11.25%	5.77%

Summary

Gentherm beats Denso on 10 of the 14 factors compared between the two stocks.

About Denso

DENSO Corporation engages in the manufacture and sale of automotive parts in Japan, rest of Asia, North America, Europe, and internationally. The company offers air-conditioning systems, including thermal management heat pump system, heat pump air-conditioning systems, refrigerant products, personal heating and cooling devices, air quality system, heat exchangers, bus air-conditioning systems, automotive freezers, and cooling products, as well as heating, ventilation, and air-conditioning units. It also provides gasoline, diesel, hybrid, electric vehicle, and fuel cell vehicle power-train systems; and safety and cockpit systems, such as driving environment recognition, vehicle dynamic control, collision safety, visibility support, cockpit information, and information security systems, as well as other products. In addition, the company offers automotive service parts and accessories, comprising spark plugs, oil and cabin air filters, wiper blades, air filter elements, starters, alternators, compressors, oxygen sensors, fuel pumps, air conditioner service parts, radiators, condensers, ion generators, air conditioners for busses and construction vehicles, and truck refrigeration products, as well as refrigerant recovery, recycling, and charging machines; and repair and support products and services. Further, it provides industrial solutions for factories in automotive parts production; agricultural solutions, including Profarm Controller, a climate control system for greenhouse and horticulture solutions; and household air conditioning equipment and industrial systems. The company was incorporated in 1949 and is headquartered in Kariya, Japan.

About Gentherm

Gentherm Incorporated designs, develops, manufactures, and sells thermal management and pneumatic comfort technologies in the United States and internationally. The company operates in two segments, Automotive and Medical. The Automotive segment offers climate comfort systems, which include seat heaters, blowers, and thermoelectric devices for variable temperature climate control seats and steering wheel heaters that are designed to provide thermal comfort to automobile passengers; integrated electronic components, such as electronic control units; and other climate comfort systems, including neck and shoulder conditioners and climate control system products for door panels, armrests, cupholders, and storage bins. It also provides battery performance solutions comprising cell connecting devices and battery cable technologies used for various types of automotive batteries; thermal management products for heating and cooling; and automotive electronic and software systems, including electronic control units for climate comfort systems, as well as for memory seat modules and other devices. In addition, it offers lumbar and massage comfort solutions, such as lumbar support, side bolster adjustment, multi-contour seats, and massage systems; automotive cable systems, including ready-made individual cables, and ready-to-install cable networks; and valve systems products consisting of applications that offer solutions in fuel management, and other valves for brake and engine systems. This segment serves light vehicle original equipment manufacturers and tier 1s, such as automotive seat manufacturers, and aftermarket seat distributors and installers. The Medical segment offers patient temperature management systems. The company was formerly known as Amerigon Incorporated and changed its name to Gentherm Incorporated in September 2012. Gentherm Incorporated was incorporated in 1991 and is headquartered in Northville, Michigan.