Gentherm (NASDAQ: THRM) and Lydall (NYSE:LDL) are both small-cap auto/tires/trucks companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Institutional and Insider Ownership

95.5% of Gentherm shares are owned by institutional investors. Comparatively, 91.6% of Lydall shares are owned by institutional investors. 2.3% of Gentherm shares are owned by company insiders. Comparatively, 4.4% of Lydall shares are owned 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 Gentherm and Lydall’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gentherm 2.28% 9.98% 6.39%
Lydall 6.67% 13.75% 8.30%

Earnings & Valuation

This table compares Gentherm and Lydall’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gentherm $985.68 million 1.32 $35.22 million $2.31 15.32
Lydall $698.44 million 1.04 $49.31 million $2.80 14.96

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

Analyst Ratings

This is a breakdown of recent ratings for Gentherm and Lydall, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gentherm 1 3 7 0 2.55
Lydall 0 0 2 0 3.00

Gentherm currently has a consensus price target of $37.40, suggesting a potential upside of 5.65%. Lydall has a consensus price target of $59.00, suggesting a potential upside of 40.81%. Given Lydall’s stronger consensus rating and higher possible upside, analysts clearly believe Lydall is more favorable than Gentherm.

Volatility & Risk

Gentherm has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500. Comparatively, Lydall has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500.

Summary

Lydall beats Gentherm on 8 of the 14 factors compared between the two stocks.

Gentherm Company Profile

Gentherm Incorporated designs, develops, and manufactures thermal management technologies in North America, Europe, and Asia. The company operates through two segments, Automotive and Industrial. The Automotive segment offers automotive seat comfort systems, including seat heaters, variable temperature climate control seats that are designed to provide individualized thermal comfort to automobile passengers; and integrated electronic components, such as blowers and electronic control units. This segment also provides specialized automotive cable system products, including ready-made wire harnesses and related wiring products; automotive steering wheel heaters, heated door and armrests, heated and cooled cup holders, and thermal storage bins; and non-automotive products comprising heated and cooled mattress and furniture. This segment serves light vehicle original equipment manufacturers (OEMs), commercial vehicle OEMs, and automotive seat manufacturers. The Industrial segment offers remote power generation systems, patient temperature management systems, and environmental testing equipment and services. The company was formerly known as Amerigon Incorporated and changed its name to Gentherm Incorporated in September 2012. Gentherm Incorporated was founded in 1968 and is headquartered in Northville, Michigan.

Lydall Company Profile

Lydall, Inc. designs, manufactures, and markets specialty engineered filtration media, industrial thermal insulating solutions, and automotive thermal and acoustical barriers for filtration/separation and thermal/acoustical applications worldwide. It operates through Performance Materials, Technical Nonwovens, and Thermal Acoustical Solutions segments. The Performance Materials segment offers filtration media solutions for air, fluid power, and industrial applications, such as clean-space, commercial, HVAC, power generation, and industrial processes. This segment also provides non-woven veils, papers, mats, and specialty composites for the building products, appliances, and energy and industrial markets; and life sciences filtration products for biopharmaceutical pre-filtration and clarification, diagnostic and analytical testing, respiratory protection, water filtration, and high purity process filtration. The Technical Nonwovens segment offers nonwoven rolled-good felt media and filter bags used primarily in industrial air and liquid filtration applications. The Thermal Acoustical Solutions segment provides engineered products for the transportation sector to thermally shield sensitive components from high heat, improve exhaust gas treatment, and lower harmful emissions, as well as assist in the reduction of powertrain and road noise. Its products are used in the tunnel, fuel tank, rear muffler, and spare tire applications, as well as outer dash, powertrain, catalytic converter, turbo charger, and manifolds of cars, trucks, SUVs, heavy duty trucks, and recreational vehicles. This segment also offers thermal and acoustical insulating solutions comprising organic and inorganic fiber composites for the automotive and truck markets. The company markets its products to original equipment manufacturers and tier-one suppliers through internal sales force and distribution network. Lydall, Inc. was founded in 1879 and is headquartered in Manchester, Connecticut.

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