Denso (DNZOY) versus The Competition Critical Analysis

Denso (OTCMKTS:DNZOY) is one of 148 publicly-traded companies in the “Automobile Components” industry, but how does it contrast to its competitors? We will compare Denso to similar businesses based on the strength of its valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations and price targets for Denso and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denso	0	3	0	0	2.00
Denso Competitors	1083	4488	6127	202	2.46

As a group, “Automobile Components” companies have a potential upside of 67.87%. Given Denso’s competitors stronger consensus rating and higher probable upside, analysts clearly believe Denso has less favorable growth aspects than its competitors.

Volatility & Risk

Denso has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Denso’s competitors have a beta of 3.88, indicating that their average share price is 288% more volatile than the S&P 500.

Dividends

Denso pays an annual dividend of $0.26 per share and has a dividend yield of 2.2%. Denso pays out 25.2% of its earnings in the form of a dividend. As a group, “Automobile Components” companies pay a dividend yield of 10.6% and pay out 24.2% of their earnings in the form of a dividend. Denso lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Institutional and Insider Ownership

48.3% of shares of all “Automobile Components” companies are held by institutional investors. 19.6% of shares of all “Automobile Components” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Denso and its competitors gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Denso	$50.09 billion	$2.93 billion	11.37
Denso Competitors	$6.49 billion	$70.54 million	5.43

Denso has higher revenue and earnings than its competitors. Denso is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Denso and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Denso	5.57%	7.74%	4.89%
Denso Competitors	-41.04%	-0.36%	-2.05%

Summary

Denso competitors beat Denso on 9 of the 15 factors compared.

About Denso

DENSO Corporation engages in the manufacture and sale of automotive parts in Japan, rest of Asia, North America, Europe, and internationally. The company offers air-conditioning systems, including thermal management heat pump system, heat pump air-conditioning systems, refrigerant products, personal heating and cooling devices, air quality system, heat exchangers, bus air-conditioning systems, automotive freezers, and cooling products, as well as heating, ventilation, and air-conditioning units. It also provides gasoline, diesel, hybrid, electric vehicle, and fuel cell vehicle power-train systems; and safety and cockpit systems, such as driving environment recognition, vehicle dynamic control, collision safety, visibility support, cockpit information, and information security systems, as well as other products. In addition, the company offers automotive service parts and accessories, comprising spark plugs, oil and cabin air filters, wiper blades, air filter elements, starters, alternators, compressors, oxygen sensors, fuel pumps, air conditioner service parts, radiators, condensers, ion generators, air conditioners for busses and construction vehicles, and truck refrigeration products, as well as refrigerant recovery, recycling, and charging machines; and repair and support products and services. Further, it provides industrial solutions for factories in automotive parts production; agricultural solutions, including Profarm Controller, a climate control system for greenhouse and horticulture solutions; and household air conditioning equipment and industrial systems. The company was incorporated in 1949 and is headquartered in Kariya, Japan.