American Axle & Manufact. (NYSE:AXL) and ChoicePoint (NYSE:CPS) are both auto/tires/trucks companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

Volatility & Risk

American Axle & Manufact. has a beta of 1.42, indicating that its stock price is 42% more volatile than the S&P 500. Comparatively, ChoicePoint has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.

Insider and Institutional Ownership

98.3% of American Axle & Manufact. shares are owned by institutional investors. Comparatively, 98.8% of ChoicePoint shares are owned by institutional investors. 1.1% of American Axle & Manufact. shares are owned by insiders. Comparatively, 3.0% of ChoicePoint shares are owned by 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for American Axle & Manufact. and ChoicePoint, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Axle & Manufact. 2 2 5 0 2.33
ChoicePoint 1 2 2 0 2.20

American Axle & Manufact. presently has a consensus target price of $19.14, indicating a potential upside of 20.70%. ChoicePoint has a consensus target price of $125.75, indicating a potential upside of 33.82%. Given ChoicePoint’s higher probable upside, analysts plainly believe ChoicePoint is more favorable than American Axle & Manufact..

Profitability

This table compares American Axle & Manufact. and ChoicePoint’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Axle & Manufact. 6.00% 28.88% 5.77%
ChoicePoint 4.10% 24.74% 8.03%

Valuation & Earnings

This table compares American Axle & Manufact. and ChoicePoint’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Axle & Manufact. $6.27 billion 0.28 $337.10 million $3.75 4.23
ChoicePoint $3.62 billion 0.46 $135.30 million $11.08 8.48

American Axle & Manufact. has higher revenue and earnings than ChoicePoint. American Axle & Manufact. is trading at a lower price-to-earnings ratio than ChoicePoint, indicating that it is currently the more affordable of the two stocks.

American Axle & Manufact. Company Profile

American Axle & Manufacturing Holdings, Inc., together with its subsidiaries, designs, engineers, validates, and manufactures driveline, metal forming, powertrain, and casting products. The company's Driveline segment offers axles, driveshafts, power transfer units, rear drive modules, transfer cases, and electric and hybrid driveline products and systems for light trucks, sport utility vehicles, crossover vehicles, passenger cars, and commercial vehicles. Its Metal Forming segment provides axle and transmission shafts, ring and pinion gears, differential gears, transmission gears and shafts, and suspension components for original equipment manufacturers and automotive suppliers. The company's Powertrain segment offers transmission module and differential assemblies, transmission valve bodies, connecting rod forging and assemblies, torsional vibration dampers, and variable valve timing products for original equipment manufacturers and automotive suppliers. Its Casting segment produces thin wall castings and high strength ductile iron castings, as well as differential cases, steering knuckles, control arms, brackets, and turbo charger housings for the light vehicle, commercial, and industrial markets. The company has operations in the United States, Canada, Mexico, South America, China, Europe, other Asian countries, and internationally. American Axle & Manufacturing Holdings, Inc. was founded in 1994 and is headquartered in Detroit, Michigan.

ChoicePoint Company Profile

Cooper-Standard Holdings Inc., through its subsidiary, Cooper-Standard Automotive Inc., designs, manufactures, and sells sealing, fuel and brake delivery, fluid transfer, and anti-vibration systems worldwide. It operates in four segments: North America, Europe, Asia Pacific, and South America. The company's sealing systems include dynamic and static seals, encapsulated glasses, stainless steel trims, flush glass systems, variable extrusions, and specialty sealing products. Its fuel and brake delivery systems comprise chassis and tank fuel lines and bundles, metallic brake lines and bundles, quick connects, direct injection and port fuel rails, and tube coatings. The company's fluid transfer systems consist of heater/coolant hoses, DPF and SCR emission lines, degas tanks, air intake and charge products, and transmission oil cooling hoses, as well as turbo charger, secondary air, and brake and clutch hoses. It also provides anti-vibration systems, such as powertrain mount systems that include multi-state vacuum switchable hydraulic engine, bi-state electric switchable hydraulic engine, conventional hydraulic, and elastomeric mounts; and chassis suspension components, which comprise conventional and hydraulic body mounts and bushings, as well as strut mounts, spring seats and bumpers, mass dampers, and dual durometer bushings. The company's products are primarily used in passenger vehicles and light trucks that are manufactured by automotive original equipment manufacturers and replacement markets. Cooper-Standard Holdings Inc. was founded in 1960 and is headquartered in Novi, Michigan.

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