Meritor (NYSE:MTOR) and Veoneer (NYSE:VNE) are both auto/tires/trucks companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Insider & Institutional Ownership

90.6% of Meritor shares are owned by institutional investors. Comparatively, 7.9% of Veoneer shares are owned by institutional investors. 2.3% of Meritor shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Meritor and Veoneer, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Meritor 0 2 5 0 2.71
Veoneer 3 10 4 0 2.06

Meritor currently has a consensus price target of $30.00, suggesting a potential upside of 63.31%. Veoneer has a consensus price target of $47.67, suggesting a potential upside of 1.92%. Given Meritor’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Meritor is more favorable than Veoneer.

Earnings & Valuation

This table compares Meritor and Veoneer’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Meritor $3.35 billion 0.47 $324.00 million $1.88 9.77
Veoneer N/A N/A N/A N/A N/A

Meritor has higher revenue and earnings than Veoneer.

Profitability

This table compares Meritor and Veoneer’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Meritor 8.06% 88.32% 9.93%
Veoneer N/A N/A N/A

Summary

Meritor beats Veoneer on 9 of the 9 factors compared between the two stocks.

About Meritor

Meritor, Inc. designs, develops, manufactures, markets, distributes, sells, services, and supports integrated systems, modules, and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation, and industrial sectors. It operates through two segments, Commercial Truck & Industrial; and Aftermarket & Trailer. The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines, and braking and suspension systems primarily for medium-and heavy-duty trucks, off-highway, military, construction, bus and coach, fire and emergency, and other applications. This segment also engages in aftermarket business. The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts, and other replacement and remanufactured parts to commercial vehicle aftermarket customers. This segment also offers various undercarriage products and systems for trailer applications. The company sells its products under the Meritor, Euclid, Trucktechnic, Meritor Green, Mach, and Meritor AllFit brands primarily to OEMs and its parts marketing operations, and dealers, as well as for other independent distributors and service garages in the aftermarket industry in North America, South America, Europe, and the Asia Pacific. The company was formerly known as ArvinMeritor, Inc. and changed its name to Meritor, Inc. in March 2011. Meritor, Inc. was founded in 1921 and is headquartered in Troy, Michigan.

About Veoneer

Veoneer, Inc. designs, develops, manufactures, and sells automotive safety electronics products. The company offers automotive radars, cameras with driver assist systems, night vision systems, positioning systems, restraint control, sensing, and brake systems. The company is based in Stockholm, Sweden. Veoneer, Inc.(NYSE:VNE.WI) operates independently of Autoliv, Inc. as of June 29, 2018.

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