Aptiv (NYSE: APTV) and BorgWarner (NYSE:BWA) are both large-cap cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.

Earnings & Valuation

This table compares Aptiv and BorgWarner’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aptiv $12.88 billion 1.87 $1.36 billion $3.81 23.82
BorgWarner $9.80 billion 1.12 $439.90 million $2.07 25.27

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

Profitability

This table compares Aptiv and BorgWarner’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aptiv 8.27% 50.01% 12.88%
BorgWarner 4.49% 21.92% 8.61%

Dividends

Aptiv pays an annual dividend of $0.88 per share and has a dividend yield of 1.0%. BorgWarner pays an annual dividend of $0.68 per share and has a dividend yield of 1.3%. Aptiv pays out 23.1% of its earnings in the form of a dividend. BorgWarner pays out 32.9% 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. BorgWarner has increased its dividend for 3 consecutive years. BorgWarner is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations for Aptiv and BorgWarner, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aptiv 1 2 16 0 2.79
BorgWarner 2 7 6 0 2.27

Aptiv presently has a consensus price target of $98.32, suggesting a potential upside of 8.31%. BorgWarner has a consensus price target of $51.53, suggesting a potential downside of 1.48%. Given Aptiv’s stronger consensus rating and higher probable upside, analysts plainly believe Aptiv is more favorable than BorgWarner.

Risk & Volatility

Aptiv has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500. Comparatively, BorgWarner has a beta of 1.81, indicating that its stock price is 81% more volatile than the S&P 500.

Insider & Institutional Ownership

88.2% of Aptiv shares are held by institutional investors. Comparatively, 96.3% of BorgWarner shares are held by institutional investors. 0.3% of Aptiv shares are held by company insiders. Comparatively, 0.7% of BorgWarner shares are held by company 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.

Summary

Aptiv beats BorgWarner on 11 of the 17 factors compared between the two stocks.

About Aptiv

Aptiv PLC, formerly Delphi Automotive PLC, is a global technology company serving the automotive sector. The Company designs and manufactures vehicle components, and provides electrical and electronic and active safety technology solutions to the global automotive and commercial vehicle markets. The Company’s segments include Electrical/Electronic Architecture, and Electronics & 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 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.

About BorgWarner

BorgWarner Inc. is engaged in providing technology solutions for combustion, hybrid and electric vehicles. The Company’s segments include Engine and Drivetrain. The Engine segment’s products include turbochargers, timing devices and chains, emissions systems and thermal systems. The Engine segment develops and manufactures products for gasoline and diesel engines, and alternative powertrains. The Drivetrain segment’s products include transmission components and systems, all-wheel drive (AWD) torque transfer systems and rotating electrical devices. The Company’s products are manufactured and sold across the world, primarily to original equipment manufacturers (OEMs) of light vehicles (passenger cars, sport-utility vehicles (SUVs), vans and light trucks). The Company’s products are also sold to other OEMs of commercial vehicles (medium-duty trucks, heavy-duty trucks and buses) and off-highway vehicles (agricultural and construction machinery and marine applications.

Receive News & Ratings for Aptiv Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Aptiv and related companies with MarketBeat.com's FREE daily email newsletter.