Analyzing Garrett Motion (NASDAQ:GTX) & Dana (NYSE:DAN)

Garrett Motion (NASDAQ:GTX) and Dana (NYSE:DAN) are both mid-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent recommendations for Garrett Motion and Dana, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Garrett Motion	0	2	6	0	2.75
Dana	1	3	5	0	2.44

Garrett Motion currently has a consensus price target of $37.00, indicating a potential upside of 83.81%. Dana has a consensus price target of $35.00, indicating a potential upside of 62.87%. Given Garrett Motion’s stronger consensus rating and higher probable upside, analysts clearly believe Garrett Motion is more favorable than Dana.

Profitability

This table compares Garrett Motion and Dana’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Garrett Motion	9.97%	-52.43%	15.48%
Dana	13.45%	5.03%	1.29%

Risk and Volatility

Garrett Motion has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500. Comparatively, Dana has a beta of 2.14, indicating that its share price is 114% more volatile than the S&P 500.

Dividends

Garrett Motion pays an annual dividend of $0.32 per share and has a dividend yield of 1.6%. Dana pays an annual dividend of $0.48 per share and has a dividend yield of 2.2%. Garrett Motion pays out 16.4% of its earnings in the form of a dividend. Dana pays out 5.0% 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. Dana is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

86.3% of Garrett Motion shares are owned by institutional investors. Comparatively, 96.8% of Dana shares are owned by institutional investors. 1.1% of Garrett Motion shares are owned by insiders. Comparatively, 1.5% of Dana shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Garrett Motion and Dana”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Garrett Motion	$3.58 billion	1.04	$310.00 million	$1.95	10.32
Dana	$7.50 billion	0.29	$85.00 million	$9.55	2.25

Garrett Motion has higher earnings, but lower revenue than Dana. Dana is trading at a lower price-to-earnings ratio than Garrett Motion, indicating that it is currently the more affordable of the two stocks.

Summary

Dana beats Garrett Motion on 10 of the 16 factors compared between the two stocks.

About Garrett Motion

Garrett Motion Inc., together with its subsidiaries, designs, manufactures, and sells turbocharging, air and fluid compression, and high-speed electric motor technologies for original equipment manufacturers and distributors worldwide. The company offers cutting-edge technology for the mobility and industrial space, including light vehicles, commercial vehicles, and industrial applications. In addition, it provides mechanical and electrical products for turbocharging and boosting internal combustion engines, as well as compressing air for fuel cell compressors, and compressing refrigerant for electric cooling compressors. The company offers its products in the aftermarket through distributors. Garrett Motion Inc. was incorporated in 2018 and is based in Rolle, Switzerland.

About Dana

Dana Incorporated, together with its subsidiaries, provides power-conveyance and energy-management solutions for vehicles and machinery in North America, Europe, South America, and the Asia Pacific. The company operates through four segments: Light Vehicle Drive Systems, Commercial Vehicle Drive and Motion Systems, Off-Highway Drive and Motion Systems, and Power Technologies. It offers drive systems, including axles, driveshafts, transmission, and wheel and track drives; motion systems, such as winches, slew drives, and hub drives; and electrodynamic technologies comprised of motors, inverters, software and control systems, battery-management systems, and fuel cell plates. The company also provides sealing solutions, such as gaskets, seals, cam covers, and oil pan modules; thermal-management technologies, including transmission and engine oil cooling, battery and electronics cooling, charge air cooling, and thermal-acoustical protective shielding; and digital solutions that include active and passive system controls, as well as descriptive and predictive analytics. It serves vehicle manufacturers in the global light vehicle, medium/heavy vehicle, and off-highway markets, as well as the stationary industrial market. The company was formerly known as Dana Holding Corporation and changed its name to Dana Incorporated in August 2016. Dana Incorporated was founded in 1904 and is headquartered in Maumee, Ohio.