Strattec Security (NASDAQ:STRT) and Tower International (NYSE:TOWR) are both small-cap auto/tires/trucks companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.
Strattec Security pays an annual dividend of $0.56 per share and has a dividend yield of 2.3%. Tower International pays an annual dividend of $0.52 per share and has a dividend yield of 2.8%. Tower International pays out 14.9% of its earnings in the form of a dividend. Tower International has raised its dividend for 3 consecutive years. Tower International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Strattec Security and Tower International’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Strattec Security||$439.20 million||0.21||$12.28 million||N/A||N/A|
|Tower International||$1.57 billion||0.25||$48.90 million||$3.50||5.35|
Tower International has higher revenue and earnings than Strattec Security.
This table compares Strattec Security and Tower International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
Strattec Security has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, Tower International has a beta of 2.16, meaning that its stock price is 116% more volatile than the S&P 500.
Institutional & Insider Ownership
78.3% of Strattec Security shares are owned by institutional investors. Comparatively, 93.5% of Tower International shares are owned by institutional investors. 7.1% of Strattec Security shares are owned by company insiders. Comparatively, 5.8% of Tower International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a summary of current ratings and target prices for Strattec Security and Tower International, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Tower International has a consensus target price of $30.00, suggesting a potential upside of 60.34%. Given Tower International’s higher possible upside, analysts plainly believe Tower International is more favorable than Strattec Security.
Tower International beats Strattec Security on 12 of the 15 factors compared between the two stocks.
Strattec Security Company Profile
Strattec Security Corporation engages in the design, development, manufacture, and marketing of automotive access control products under the VAST brand primarily in the United States. The company offers mechanical locks and keys, electronically enhanced locks and keys, steering column and instrument panel ignition lock housings, latches, power sliding side door systems, power lift gate systems, power deck lid systems, door handles, and related products. It also provides 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 Canada, Mexico, Europe, South America, Korea, China, and India. Strattec Security Corporation was founded in 1908 and is headquartered in Milwaukee, Wisconsin.
Tower International Company Profile
Tower International, Inc. manufactures and sells engineered automotive structural metal components and assemblies primarily for original equipment manufacturers. It operates in two segments, North America and Brazil. The company provides body structures and assemblies, including structural metal components, which comprise body pillars, roof rails, and side sills; and Class A surfaces and assemblies that consist of body sides, hoods, doors, fenders, and pickup truck boxes. It also offers lower vehicle frames and structures, such as pickup truck and sport utility vehicle (SUV) full frames, automotive engine and rear suspension cradles, floor pan components, and cross members. In addition, the company offers complex body-in-white assemblies comprising various components and sub-assemblies. Its products have applications in small and large cars, crossovers, pickups, and SUVs. The company was formerly known as Tower Automotive, LLC and changed its name to Tower International, Inc. in October 2010. Tower International, Inc. was founded in 1993 and is headquartered in Livonia, Michigan.
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