Adient (ADNT) and Standard Motor Products (SMP) Critical Survey

Adient (NYSE: SMP) and Standard Motor Products (NYSE:SMP) are both auto/tires/trucks companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Dividends

Adient pays an annual dividend of $1.10 per share and has a dividend yield of 2.4%. Standard Motor Products pays an annual dividend of $0.84 per share and has a dividend yield of 1.6%. Adient pays out 11.8% of its earnings in the form of a dividend. Standard Motor Products pays out 29.7% 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. Standard Motor Products has raised its dividend for 7 consecutive years. Adient is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Adient and Standard Motor Products’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Adient $16.21 billion 0.26 $877.00 million $9.35 4.91
Standard Motor Products $1.12 billion 1.03 $37.97 million $2.83 18.14

Adient has higher revenue and earnings than Standard Motor Products. Adient 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.

Volatility & Risk

Adient has a beta of -0.55, meaning that its stock price is 155% less volatile than the S&P 500. Comparatively, Standard Motor Products has a beta of 1.7, meaning that its stock price is 70% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Adient 0.08% 14.27% 4.89%
Standard Motor Products 2.66% 12.38% 6.89%

Analyst Ratings

This is a summary of recent recommendations for Adient and Standard Motor Products, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Adient 2 7 2 0 2.00
Standard Motor Products 0 3 1 0 2.25

Adient currently has a consensus target price of $61.36, suggesting a potential upside of 33.66%. Standard Motor Products has a consensus target price of $54.00, suggesting a potential upside of 5.20%. Given Adient’s higher probable upside, research analysts plainly believe Adient is more favorable than Standard Motor Products.

Institutional and Insider Ownership

83.5% of Standard Motor Products shares are held by institutional investors. 0.7% of Adient shares are held by company insiders. Comparatively, 6.4% of Standard Motor Products shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Standard Motor Products beats Adient on 9 of the 17 factors compared between the two stocks.

About Adient

Adient plc designs, manufactures, and markets a range of seating systems and components for passenger cars, commercial vehicles, and light trucks. The company operates through two segments, Seating and Interiors. The Seating segment produces automotive seat metal structures and mechanisms, foams, trims, fabrics, and seat systems. The Interiors segment produces instrument panels, floor consoles, door panels, overhead consoles, cockpit systems, decorative trims, and other products. The company operates in the Americas, Europe, China, and internationally. Adient plc was incorporated in 2016 and is based in Dublin, Ireland.

About Standard Motor Products

Standard Motor Products, Inc. manufactures and distributes replacement parts for motor vehicles in the automotive aftermarket industry. Its Engine Management segment manufactures and distributes engine management replacement parts, including electronic ignition control modules, fuel injectors, remanufactured diesel injectors and pumps, ignition wires, coils, switches, relays, EGR valves, distributor caps and rotors, various sensors primarily measuring temperature, vehicle systems, electronic throttle bodies, and other engine management components primarily under the Standard, Blue Streak, BWD, Select, Intermotor, OEM, LockSmart, TechSmart, Tech Expert, and GP Sorensen brands. The company's Temperature Control segment manufacture, remanufacture, and distribute replacement parts for automotive temperature control systems, engine cooling systems, power window accessories, and windshield washer systems, primarily under the Four Seasons, EVERCO, ACi, and Hayden brands. This segment provides new and remanufactured compressors, clutch assemblies, blower and radiator fan motors, filter dryers, evaporators, accumulators, hose assemblies, thermal expansion devices, heater valves, heater cores, AC service tools and chemicals, fan assemblies, fan clutches, oil coolers, window lift motors, window regulators and assemblies, and windshield washer pumps. The company sells its products primarily to large retail chains, warehouse distributors, original equipment manufacturers, and original equipment service part operations in the United States, Canada, Latin America, and Europe. Standard Motor Products, Inc. was founded in 1919 and is headquartered in Long Island City, New York.

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