Head to Head Contrast: Denso (OTCMKTS:DNZOY) and Patrick Industries (NASDAQ:PATK)

Denso (OTCMKTS:DNZOY) and Patrick Industries (NASDAQ:PATK) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.

Insider & Institutional Ownership

93.3% of Patrick Industries shares are held by institutional investors. 3.8% of Patrick Industries shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Denso and Patrick Industries”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Denso	$50.09 billion	0.67	$2.93 billion	$1.03	11.20
Patrick Industries	$3.95 billion	0.53	$135.06 million	$4.22	15.38

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

Risk and Volatility

Denso has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Patrick Industries has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Profitability

This table compares Denso and Patrick Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Denso	5.59%	7.85%	4.96%
Patrick Industries	3.74%	12.69%	4.69%

Dividends

Denso pays an annual dividend of $0.26 per share and has a dividend yield of 2.3%. Patrick Industries pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. Denso pays out 25.2% of its earnings in the form of a dividend. Patrick Industries pays out 44.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Patrick Industries has raised its dividend for 6 consecutive years. Patrick Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and target prices for Denso and Patrick Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denso	1	2	0	0	1.67
Patrick Industries	1	2	7	0	2.60

Patrick Industries has a consensus price target of $114.00, indicating a potential upside of 75.60%. Given Patrick Industries’ stronger consensus rating and higher probable upside, analysts clearly believe Patrick Industries is more favorable than Denso.

Summary

Patrick Industries beats Denso on 11 of the 17 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 Patrick Industries

Patrick Industries, Inc. manufactures and distributes component products and materials for the recreational vehicle, marine, manufactured housing, and industrial markets in the United States, Mexico, China, and Canada. Its Manufacturing segment manufactures and sells laminated products for furniture, shelving, wall, countertop, and cabinet products; cabinet doors, fiberglass bath fixtures, and tile systems; hardwood furniture, vinyl printing, amplifiers, tower speakers, soundbars, and subwoofers; solid surface, granite, and quartz countertop fabrication; aluminum products; fiberglass and plastic components; RV paintings; decorative vinyl and paper laminated panels; softwoods lumber; custom cabinets; polymer-based flooring products; dash panels; and other products. This segment also provides wrapped vinyl, paper, and hardwood profile mouldings; interior passage doors; air handling products; slide-out trim and fascia; treated, untreated, and laminated plywood; fiberglass and plastic helm systems and components; boat towers, tops, trailers, and frames; adhesives and sealants; thermoformed shower surrounds; specialty bath, and closet building products; wiring and wire harnesses; aluminum and plastic fuel tanks; CNC molds, composite parts, marine hardware; slotwall panels, components; and other products. The company's Distribution segment distributes pre-finished wall and ceiling panels, drywall and finishing products, electronic and audio system components, appliances, marine accessories, wiring products, electrical and plumbing products, fiber reinforced polyester products; cement siding products, raw and processed lumber, interior passage, roofing, laminate, and ceramic flooring products, shower doors, furniture, fireplaces and surrounds, interior and exterior lighting products, and other products. This segment also offers transportation and logistics services. Patrick Industries, Inc. was incorporated in 1959 and is based in Elkhart, Indiana.