Harman International Industries (NYSE: HAR) and Visteon Corporation (NYSE:VC) are both cyclical consumer goods & services companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Volatility & Risk

Harman International Industries has a beta of 1.64, indicating that its share price is 64% more volatile than the S&P 500. Comparatively, Visteon Corporation has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Institutional & Insider Ownership

85.8% of Harman International Industries shares are held by institutional investors. 0.9% of Harman International Industries shares are held by company insiders. Comparatively, 0.2% of Visteon Corporation 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 Harman International Industries and Visteon Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Harman International Industries 5.12% 15.69% 6.40%
Visteon Corporation 4.35% 27.56% 8.67%

Dividends

Harman International Industries pays an annual dividend of $1.40 per share and has a dividend yield of 1.3%. Visteon Corporation does not pay a dividend. Harman International Industries pays out 27.6% of its earnings in the form of a dividend. Harman International Industries has raised its dividend for 6 consecutive years.

Analyst Ratings

This is a summary of current recommendations and price targets for Harman International Industries and Visteon Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Harman International Industries 0 6 0 0 2.00
Visteon Corporation 0 4 7 0 2.64

Harman International Industries presently has a consensus target price of $107.25, suggesting a potential downside of 3.81%. Visteon Corporation has a consensus target price of $112.60, suggesting a potential downside of 7.27%. Given Harman International Industries’ higher possible upside, equities research analysts clearly believe Harman International Industries is more favorable than Visteon Corporation.

Valuation & Earnings

This table compares Harman International Industries and Visteon Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Harman International Industries N/A N/A N/A $5.07 21.99
Visteon Corporation $3.17 billion 1.19 $335.00 million $4.19 28.98

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

Summary

Harman International Industries beats Visteon Corporation on 8 of the 14 factors compared between the two stocks.

Harman International Industries Company Profile

Harman International Industries, Incorporated is engaged in the designing and engineering of connected products and solutions for automakers, consumers and enterprises, including connected car systems, audio and visual products, enterprise automation solutions and connected services. The Company’s segments include Connected Car, Lifestyle Audio, Professional Solutions, Connected Services and Other. The Connected Car segment designs, manufactures and markets connected car systems for vehicle applications. The Lifestyle Audio segment designs, manufactures and markets car audio systems. The Professional Solutions segment designs, manufactures and markets a range of audio, lighting, video and control, and automation solutions for entertainment and enterprise applications The Connected Services segment includes the operations of Symphony Teleca Corporation, Red Bend Ltd. and its automotive services businesses. Its brands include AKG, AMX, Crown, Infinity, JBL, Revel, Soundcraft and Studer.

Visteon Corporation Company Profile

Visteon Corporation is a global automotive supplier that designs, engineers and manufactures electronics products for original equipment vehicle manufacturer (OEM), including Ford, Mazda, Nissan/Renault, General Motors, Honda BMW and Daimler. The Company operates through Electronics segment. The Electronics segment provides vehicle cockpit electronics products to customers, including instrument clusters, information displays, infotainment, audio systems, telematics solutions and head up displays. It designs and manufacturers vehicle cockpit electronics components, modules and systems. It offers a range of information displays incorporating a sleek profile, craftsmanship and touch sensors, designed to deliver high performance for the automotive market. It offers a range of audio products, including audio head units, and analog and digital radios, which deliver consumer device connectivity. It offers an automotive-grade, integrated domain controller approach, called Smartcore.

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