China Automotive Systems (NASDAQ:CAAS) and Gentex (NASDAQ:GNTX) are both auto/tires/trucks companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.

Earnings & Valuation

This table compares China Automotive Systems and Gentex’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Automotive Systems $431.43 million 0.23 $9.96 million $0.32 9.91
Gentex $1.86 billion 3.49 $424.68 million $1.66 15.91

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

Risk and Volatility

China Automotive Systems has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500. Comparatively, Gentex has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Institutional and Insider Ownership

2.8% of China Automotive Systems shares are owned by institutional investors. Comparatively, 82.0% of Gentex shares are owned by institutional investors. 63.3% of China Automotive Systems shares are owned by insiders. Comparatively, 0.4% of Gentex shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares China Automotive Systems and Gentex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Automotive Systems 0.51% 0.62% 0.29%
Gentex 18.60% 16.26% 14.22%

Analyst Ratings

This is a summary of current recommendations and price targets for China Automotive Systems and Gentex, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Automotive Systems 0 0 1 0 3.00
Gentex 1 1 5 0 2.57

China Automotive Systems currently has a consensus target price of $5.00, suggesting a potential upside of 57.73%. Gentex has a consensus target price of $29.14, suggesting a potential upside of 10.35%. Given China Automotive Systems’ stronger consensus rating and higher possible upside, research analysts clearly believe China Automotive Systems is more favorable than Gentex.

Summary

Gentex beats China Automotive Systems on 9 of the 14 factors compared between the two stocks.

China Automotive Systems Company Profile

China Automotive Systems, Inc., through its subsidiaries, manufactures and sells automotive systems and components in the People's Republic of China. The company produces rack and pinion power steering gears for cars and light duty vehicles; integral power steering gears for heavy-duty vehicles; power steering parts for light duty vehicles; sensor modules; automobile steering systems and columns; and automobile electronic systems and parts. It is also involved in the marketing of automotive parts in North America and Brazil, as well as the provision of after sales, and research and development support services. The company primarily sells its products to the original equipment manufacturing customers. China Automotive Systems, Inc. was founded in 2003 and is headquartered in Wuhan City, the People's Republic of China.

Gentex Company Profile

Gentex Corporation provides digital vision, connected car, dimmable glass, and fire protection products worldwide. It designs, develops, manufactures, and markets automotive products, including interior and exterior electrochromic automatic-dimming rearview mirrors, automotive electronics, and non-automatic-dimming rearview mirrors for automotive passenger cars, light trucks, pick-up trucks, sport utility vehicles, and vans for original equipment manufacturers, tier one automotive mirror manufacturers, and various aftermarket and accessory customers. The company also manufactures and sells variable dimmable windows to aircraft manufacturers and airline operators. In addition, it provides photoelectric smoke detectors and alarms, electrochemical carbon monoxide detectors and alarms, audible and visual signaling alarms, and bells and speakers for use in fire detection systems in office buildings, hotels, and other commercial and residential establishments. Gentex Corporation sells its fire protection products directly, as well as through sales managers and manufacturer representative organizations to fire protection and security product distributors, electrical wholesale houses, and original equipment manufacturers of fire protection systems. The company was founded in 1974 and is headquartered in Zeeland, Michigan.

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