Standard Motor Products (NYSE:SMP) and Garrett Motion (NYSE:GTX) are both small-cap auto/tires/trucks companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Volatility and Risk

Standard Motor Products has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Garrett Motion has a beta of 1.66, meaning that its stock price is 66% more volatile than the S&P 500.

Profitability

This table compares Standard Motor Products and Garrett Motion’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Standard Motor Products 4.35% 14.40% 7.58%
Garrett Motion 6.84% -9.05% 10.24%

Valuation & Earnings

This table compares Standard Motor Products and Garrett Motion’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Standard Motor Products $1.09 billion 1.05 $43.00 million $2.55 19.95
Garrett Motion $3.38 billion 0.19 $1.18 billion $4.05 2.17

Garrett Motion has higher revenue and earnings than Standard Motor Products. Garrett Motion is trading at a lower price-to-earnings ratio than Standard Motor Products, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

77.5% of Standard Motor Products shares are held by institutional investors. Comparatively, 80.9% of Garrett Motion shares are held by institutional investors. 6.6% of Standard Motor Products shares are held by insiders. Comparatively, 0.4% of Garrett Motion shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Standard Motor Products and Garrett Motion, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Standard Motor Products 0 0 1 0 3.00
Garrett Motion 2 4 0 0 1.67

Standard Motor Products currently has a consensus target price of $61.00, suggesting a potential upside of 19.94%. Garrett Motion has a consensus target price of $13.50, suggesting a potential upside of 53.58%. Given Garrett Motion’s higher probable upside, analysts plainly believe Garrett Motion is more favorable than Standard Motor Products.

Summary

Garrett Motion beats Standard Motor Products on 8 of the 14 factors compared between the two stocks.

Standard Motor Products Company Profile

Standard Motor Products, Inc. manufactures and distributes replacement parts for motor vehicles in the automotive aftermarket industry. The company operates in two segments, Engine Management and Temperature Control. The Engine Management segment offers electronic ignition control modules, new and remanufactured fuel injectors, ignition wires, coils, switches, relays, EGR valves, distributor caps and rotors, sensors, electronic throttle bodies, keyless entry transmitters, safety-related components, and other engine management components. It offers its products primarily under the Standard, Blue Streak, Intermotor, Standard Diesel, BWD Select, BWD, OEM, TechSmart, Tech Expert, GP Sorensen, LockSmart, and SMP Blue Streak brand names, as well as under private labels comprising NAPA Echlin NAPA Belden. The Temperature Control segment provides components for the temperature control systems, engine cooling systems, power window accessories, and windshield washer systems of motor vehicles under the Four Seasons, EVERCO, ACI, Hayden, Pro Source, and Factory Air brands. It provides new and remanufactured air conditioning compressors, air conditioning compressor repair kits, clutch assemblies, blower and radiator fan motors, filter dryers, evaporators, accumulators, hose assemblies, thermal expansion devices, heater valves and cores, A/C service tools and chemicals, fan assemblies and clutches, oil coolers, window lift motors, window regulators and assemblies, and windshield washer pumps. The company sells its products primarily to automotive aftermarket retailers, program distribution groups, warehouse distributors, original equipment manufacturers, and original equipment service part operations in the United States, Canada, Mexico, Europe, Asia, and other Latin American countries. Standard Motor Products, Inc. was founded in 1919 and is headquartered in Long Island City, New York.

Garrett Motion Company Profile

Garrett Motion Inc. designs, manufactures, and sells turbocharger and electric boosting technologies for light and commercial vehicle original equipment manufacturers and the aftermarket worldwide. The company offers light vehicle gasoline and diesel, and commercial vehicle turbochargers. Its integrated vehicle health management tools detect intermittent faults and anomalies to provide understanding of the real-time health of a vehicle system. The company offers its products through distribution networks. Garrett Motion Inc. was incorporated in 2018 and is headquartered in Rolle, Switzerland.

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