Analyzing Autoliv (NYSE:ALV) & Goodyear Tire & Rubber (NASDAQ:GT)

Autoliv (NYSE:ALV) and Goodyear Tire & Rubber (NASDAQ:GT) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, analyst recommendations, institutional ownership and risk.

Earnings and Valuation

This table compares Autoliv and Goodyear Tire & Rubber”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Autoliv	$10.81 billion	0.81	$735.00 million	$8.34	14.53
Goodyear Tire & Rubber	$18.28 billion	0.06	-$1.72 billion	($2.03)	-1.98

Autoliv has higher earnings, but lower revenue than Goodyear Tire & Rubber. Goodyear Tire & Rubber is trading at a lower price-to-earnings ratio than Autoliv, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

69.6% of Autoliv shares are held by institutional investors. Comparatively, 84.2% of Goodyear Tire & Rubber shares are held by institutional investors. 0.3% of Autoliv shares are held by company insiders. Comparatively, 0.5% of Goodyear Tire & Rubber shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Autoliv and Goodyear Tire & Rubber’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Autoliv	5.62%	28.89%	8.65%
Goodyear Tire & Rubber	-3.33%	-6.69%	-1.12%

Volatility & Risk

Autoliv has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500. Comparatively, Goodyear Tire & Rubber has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Autoliv and Goodyear Tire & Rubber, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Autoliv	0	6	6	0	2.50
Goodyear Tire & Rubber	3	2	2	0	1.86

Autoliv currently has a consensus price target of $134.92, suggesting a potential upside of 11.37%. Goodyear Tire & Rubber has a consensus price target of $7.46, suggesting a potential upside of 85.57%. Given Goodyear Tire & Rubber’s higher probable upside, analysts clearly believe Goodyear Tire & Rubber is more favorable than Autoliv.

Summary

Autoliv beats Goodyear Tire & Rubber on 10 of the 14 factors compared between the two stocks.

About Autoliv

Autoliv, Inc. develops and manufactures automotive safety systems and components for vehicle manufacturers around the world. Its products include airbags, seatbelts, steering wheels, inflators and related restraint-system components designed to help protect vehicle occupants in a crash. The company also develops safety solutions such as pedestrian-protection systems and works on technologies intended to improve vehicle safety. Its products are supplied to automakers across global markets, with manufacturing and engineering operations in multiple countries.

About Goodyear Tire & Rubber

The Goodyear Tire & Rubber Company is a global manufacturer of tires and related products and services. Founded in Akron, Ohio, in 1898, the company makes tires for passenger and light trucks, commercial vehicles, aircraft, and off-road equipment, as well as for original-equipment and replacement markets. Goodyear sells products under brands including Goodyear and Cooper. Its tire-related offerings also include retreading, vehicle and fleet services, and solutions for commercial customers. The company serves customers across markets around the world and is headquartered in Akron, Ohio.