Reviewing CarGurus (NASDAQ:CARG) and Standard Motor Products (NYSE:SMP)

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

Volatility and Risk

CarGurus has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Standard Motor Products has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500.

Institutional and Insider Ownership

86.9% of CarGurus shares are owned by institutional investors. Comparatively, 81.3% of Standard Motor Products shares are owned by institutional investors. 17.0% of CarGurus shares are owned by company insiders. Comparatively, 5.0% of Standard Motor Products shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares CarGurus and Standard Motor Products”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CarGurus	$894.38 million	3.93	$20.97 million	$0.35	96.22
Standard Motor Products	$1.46 billion	0.50	$27.50 million	$1.40	23.88

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

Analyst Recommendations

This is a breakdown of current ratings for CarGurus and Standard Motor Products, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CarGurus	0	6	6	0	2.50
Standard Motor Products	0	0	0	0	0.00

CarGurus currently has a consensus target price of $37.86, indicating a potential upside of 12.44%. Given CarGurus’ stronger consensus rating and higher probable upside, analysts plainly believe CarGurus is more favorable than Standard Motor Products.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CarGurus	4.28%	32.54%	20.08%
Standard Motor Products	2.02%	12.12%	4.85%

Summary

CarGurus beats Standard Motor Products on 11 of the 14 factors compared between the two stocks.

About CarGurus

CarGurus, Inc. operates an online automotive platform for buying and selling vehicles in the United States and internationally. It operates through two segments, U.S. Marketplace and Digital Wholesale. The company provides an online automotive marketplace where customers can search for new and used car listings from its dealers and sell their car to dealers and other consumers; and paid listings subscriptions for enhanced access to its marketplace that connects dealers to a large audience of informed and engaged consumers. It also offers dealer and non-dealer advertising products for its websites and social media platforms. The company operates online marketplaces under the CarGurus brand in the United States, Canada, and the United Kingdom; Autolist and CarOffer brands in the United States; and PistonHeads brand in the United Kingdom. The company was formerly known as CarGurus LLC and changed its name to CarGurus, Inc. in June 2015. CarGurus, Inc. was founded in 2005 and is headquartered in Cambridge, Massachusetts.

About Standard Motor Products

Standard Motor Products, Inc. manufactures and distributes replacement automotive parts in the United States and internationally. The company operates through three segments: Vehicle Control, Temperature Control, and Engineered Solutions segments. The company provides components for the ignition, emissions, and fuel delivery systems, such as air injection and induction components, air management valves, regulators and solenoids, exhaust gas recirculation components, fuel injectors and related components, fuel valves, ignition coils, connectors and sockets, modules, pumps, relays and fuses, starting and charging system parts, and vapor and purge components. It also offers electrical switches and actuators; chassis and drivetrain sensors, such as anti-lock brake and vehicle speed sensors; fluid level sensors; pressure sensors comprising tire pressure monitoring; temperature sensors; sensors for advanced driver assistance systems; battery cables, pigtails, and sockets, as well as various electrical wire, terminals, connectors, and tools for servicing a vehicle’s electrical system; and spark plug, coil on plug boots, and ignition system accessories. In addition, the company offers AC system components that include compressors, air conditioning repair kits, connecting lines, heat exchangers, and expansion devices; parts that provide engine, transmission, electric drive motor, and battery temperature management; thermal management products, sensors, switches, power distribution, electrification and electronics, injections and fuel delivery, ignition and emissions, and clamping devices for commercial and light vehicles, construction, agriculture, power sports, marine, hydraulics, and lawn and garden sectors. It serves retailers and distributors, original equipment manufacturers and their suppliers, system integrators, and original equipment service part manufacturers. The company was founded in 1919 and is headquartered in Long Island City, New York.