Financial Review: Harman International Industries (HAR) & Delphi Automotive PLC (DLPH)

Delphi Automotive PLC (NYSE: DLPH) and Harman International Industries (NYSE:HAR) are both mid-cap auto, truck & motorcycle parts – nec companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Dividends

Delphi Automotive PLC pays an annual dividend of $1.16 per share and has a dividend yield of 1.2%. Harman International Industries pays an annual dividend of $1.40 per share and has a dividend yield of 1.3%. Delphi Automotive PLC pays out 22.6% of its earnings in the form of a dividend. Harman International Industries pays out 27.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Delphi Automotive PLC has increased its dividend for 6 consecutive years.

Profitability

This table compares Delphi Automotive PLC and Harman International Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Delphi Automotive PLC 8.00% 57.92% 14.04%
Harman International Industries 5.12% 15.69% 6.40%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Delphi Automotive PLC and Harman International Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Delphi Automotive PLC 1 4 13 0 2.67
Harman International Industries 0 6 0 0 2.00

Delphi Automotive PLC presently has a consensus target price of $105.24, suggesting a potential upside of 10.44%. Harman International Industries has a consensus target price of $111.67, suggesting a potential upside of 0.15%. Given Delphi Automotive PLC’s stronger consensus rating and higher probable upside, research analysts plainly believe Delphi Automotive PLC is more favorable than Harman International Industries.

Insider & Institutional Ownership

90.6% of Delphi Automotive PLC shares are owned by institutional investors. Comparatively, 85.8% of Harman International Industries shares are owned by institutional investors. 0.3% of Delphi Automotive PLC shares are owned by company insiders. Comparatively, 0.9% of Harman International Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Delphi Automotive PLC and Harman International Industries’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Delphi Automotive PLC $16.66 billion 1.52 $1.26 billion $5.13 18.58
Harman International Industries N/A N/A N/A $5.06 22.04

Delphi Automotive PLC has higher revenue and earnings than Harman International Industries. Delphi Automotive PLC is trading at a lower price-to-earnings ratio than Harman International Industries, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Delphi Automotive PLC has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Harman International Industries has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500.

Summary

Delphi Automotive PLC beats Harman International Industries on 11 of the 14 factors compared between the two stocks.

Delphi Automotive PLC Company Profile

Delphi Automotive PLC is a global technology company serving the automotive sector. The Company designs and manufactures vehicle components, and provides electrical and electronic, powertrain and active safety technology solutions to the global automotive and commercial vehicle markets. The Company’s segments include Electrical/Electronic Architecture, Powertrain Systems, and Electronics and Safety. The Electrical/Electronic Architecture segment provides complete design of the vehicle’s electrical architecture, including connectors, wiring assemblies and harnesses, electrical centers and hybrid high voltage and safety distribution systems. The Powertrain Systems segment offers products for engine management systems (EMS). The Electronics and Safety segment offers a range of electronic and safety equipment and software in the areas of controls, security, infotainment, communications and safety systems.

Harman International Industries Company Profile

Harman International Industries, Incorporated is engaged in the designing and engineering of connected products and solutions for automakers, consumers and enterprises, including connected car systems, audio and visual products, enterprise automation solutions and connected services. The Company’s segments include Connected Car, Lifestyle Audio, Professional Solutions, Connected Services and Other. The Connected Car segment designs, manufactures and markets connected car systems for vehicle applications. The Lifestyle Audio segment designs, manufactures and markets car audio systems. The Professional Solutions segment designs, manufactures and markets a range of audio, lighting, video and control, and automation solutions for entertainment and enterprise applications The Connected Services segment includes the operations of Symphony Teleca Corporation, Red Bend Ltd. and its automotive services businesses. Its brands include AKG, AMX, Crown, Infinity, JBL, Revel, Soundcraft and Studer.

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