Critical Survey: Metaldyne Performance Group (MPG) and Motorcar Parts of America (MPAA)

Metaldyne Performance Group (NYSE: MPG) and Motorcar Parts of America (NASDAQ:MPAA) are both small-cap auto, truck & motorcycle parts – nec companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.

Valuation and Earnings

This table compares Metaldyne Performance Group and Motorcar Parts of America’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Metaldyne Performance Group N/A N/A N/A $1.39 15.76
Motorcar Parts of America $421.25 million 1.15 $37.57 million $1.79 14.25

Motorcar Parts of America has higher revenue and earnings than Metaldyne Performance Group. Motorcar Parts of America is trading at a lower price-to-earnings ratio than Metaldyne Performance Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Metaldyne Performance Group pays an annual dividend of $0.37 per share and has a dividend yield of 1.7%. Motorcar Parts of America does not pay a dividend. Metaldyne Performance Group pays out 26.6% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and price targets for Metaldyne Performance Group and Motorcar Parts of America, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Metaldyne Performance Group 0 1 0 0 2.00
Motorcar Parts of America 0 0 3 0 3.00

Metaldyne Performance Group presently has a consensus price target of $21.00, suggesting a potential downside of 4.11%. Motorcar Parts of America has a consensus price target of $36.67, suggesting a potential upside of 43.79%. Given Motorcar Parts of America’s stronger consensus rating and higher probable upside, analysts plainly believe Motorcar Parts of America is more favorable than Metaldyne Performance Group.

Institutional and Insider Ownership

18.6% of Metaldyne Performance Group shares are held by institutional investors. 5.1% of Metaldyne Performance Group shares are held by insiders. Comparatively, 4.4% of Motorcar Parts of America shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Metaldyne Performance Group and Motorcar Parts of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Metaldyne Performance Group 2.60% 9.80% 2.11%
Motorcar Parts of America 8.03% 15.55% 8.80%

Summary

Motorcar Parts of America beats Metaldyne Performance Group on 9 of the 12 factors compared between the two stocks.

Metaldyne Performance Group Company Profile

Metaldyne Performance Group Inc. provides components for use in engine, transmission and driveline (Powertrain) and chassis, suspension, steering and brake component (Safety-Critical) Platforms for the global light, commercial and industrial vehicle markets. The Company produces these components using complex metal-forming manufacturing technologies and processes for a customer base of vehicle original equipment manufacturers and Tier I suppliers. The Company operates through three segments: HHI, Metaldyne and Grede. Its metal-forming manufacturing technologies and processes include Aluminum Die Casting, Forging, Iron Casting and Powder Metal Forming, as well as value-added manufacturing processes, such as Advanced Machining and Assembly. These technologies and processes are used to create a range of customized Powertrain and Safety-Critical components that address requirements for power density, power generation, power/torque transfer, strength and noise, vibration and harshness.

Motorcar Parts of America Company Profile

Motorcar Parts of America, Inc. is a manufacturer, remanufacturer and distributor of automotive aftermarket parts, including alternators, starters, wheel hub assembly, brake master cylinders, brake power boosters and turbochargers utilized in imported and domestic passenger vehicles, light trucks and heavy-duty applications. The Company sells its products in North America to auto parts retail and traditional warehouse chains and to automobile manufacturers for both their aftermarket programs and their warranty replacement programs (OES). It recycles materials, including metal from the used cores and corrugated packaging. The Company carries over 13,000 stock keeping units (SKUs) for automotive parts that are sold under its customers’ recognized private label brand names and its Quality-Built, Pure Energy, Xtreme, Reliance and other brand names. It sells its products to automotive retail outlets and the professional repair market throughout the United States and Canada.

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