Contrasting Delphi Automotive PLC (DLPH) and Meritor (MTOR)

Delphi Automotive PLC (NYSE: DLPH) and Meritor (NYSE:MTOR) are both mid-cap auto/tires/trucks companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.

Profitability

This table compares Delphi Automotive PLC and Meritor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Delphi Automotive PLC 7.51% 60.14% 14.35%
Meritor 17.03% -106.67% 5.68%

Dividends

Delphi Automotive PLC pays an annual dividend of $1.16 per share and has a dividend yield of 1.2%. Meritor does not pay a dividend. Delphi Automotive PLC pays out 24.6% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings for Delphi Automotive PLC and Meritor, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Delphi Automotive PLC 1 4 13 0 2.67
Meritor 0 4 4 0 2.50

Delphi Automotive PLC presently has a consensus price target of $103.59, indicating a potential upside of 4.37%. Meritor has a consensus price target of $25.44, indicating a potential downside of 3.06%. Given Delphi Automotive PLC’s stronger consensus rating and higher possible upside, analysts clearly believe Delphi Automotive PLC is more favorable than Meritor.

Institutional and Insider Ownership

90.1% of Delphi Automotive PLC shares are owned by institutional investors. Comparatively, 93.2% of Meritor shares are owned by institutional investors. 0.3% of Delphi Automotive PLC shares are owned by insiders. Comparatively, 2.9% of Meritor shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Delphi Automotive PLC has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500. Comparatively, Meritor has a beta of 2.3, indicating that its share price is 130% more volatile than the S&P 500.

Valuation and Earnings

This table compares Delphi Automotive PLC and Meritor’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Delphi Automotive PLC $17.01 billion 1.56 $3.06 billion $4.72 21.03
Meritor $3.15 billion 0.74 $255.00 million $6.02 4.36

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

Summary

Delphi Automotive PLC beats Meritor on 9 of the 16 factors compared between the two stocks.

Delphi Automotive PLC Company Profile

Delphi Automotive PLC is a global technology company serving the automotive sector. The Company designs and manufactures vehicle components, and provides electrical and electronic, powertrain and active safety technology solutions to the global automotive and commercial vehicle markets. The Company’s segments include Electrical/Electronic Architecture, Powertrain Systems, and Electronics and Safety. The Electrical/Electronic Architecture segment provides complete design of the vehicle’s electrical architecture, including connectors, wiring assemblies and harnesses, electrical centers and hybrid high voltage and safety distribution systems. The Powertrain Systems segment offers products for engine management systems (EMS). The Electronics and Safety segment offers a range of electronic and safety equipment and software in the areas of controls, security, infotainment, communications and safety systems.

Meritor Company Profile

Meritor, Inc. is a supplier of a range of integrated systems, modules and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The Company’s segments include Commercial Truck & Industrial and Aftermarket & Trailer. The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, for medium- and heavy-duty trucks, off-highway, military, construction, bus and coach, fire and emergency and other applications in North America, South America, Europe and Asia Pacific. The Commercial Truck & Industrial segment also includes the Company’s aftermarket businesses in Asia Pacific and South America. The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement and remanufactured parts to commercial vehicle aftermarket customers in North America and Europe.

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