Analyzing Martinrea International (OTCMKTS:MRETF) and ARB (OTCMKTS:ARBFF)

ARB (OTCMKTS:ARBFF) and Martinrea International (OTCMKTS:MRETF) are both consumer cyclical companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, dividends, risk and earnings.

Dividends

ARB pays an annual dividend of $0.29 per share and has a dividend yield of 1.3%. Martinrea International pays an annual dividend of $0.09 per share and has a dividend yield of 1.1%. ARB pays out 48.6% of its earnings in the form of a dividend. Martinrea International pays out 96.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ARB is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and price targets for ARB and Martinrea International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARB	1	1	0	0	1.50
Martinrea International	0	0	1	0	3.00

Martinrea International has a consensus target price of $17.00, suggesting a potential upside of 104.41%. Given Martinrea International’s stronger consensus rating and higher probable upside, analysts clearly believe Martinrea International is more favorable than ARB.

Earnings and Valuation

This table compares ARB and Martinrea International’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARB	N/A	N/A	N/A	$0.59	38.17
Martinrea International	N/A	N/A	N/A	$0.09	89.37

ARB is trading at a lower price-to-earnings ratio than Martinrea International, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

22.0% of ARB shares are held by institutional investors. Comparatively, 35.7% of Martinrea International shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares ARB and Martinrea International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARB	N/A	N/A	N/A
Martinrea International	N/A	N/A	N/A

Summary

Martinrea International beats ARB on 5 of the 8 factors compared between the two stocks.

About ARB

ARB Corporation Limited engages in the design, manufacture, distribution, and sale of motor vehicle accessories and light metal engineering works. The company provides bull bars, side rails and steps, canopies, UTE lids and tub accessories, roof racks, cross bars and carriers, suspension systems, driving lights, air compressors and tire accessories, air lockers, winches, recovery equipment and points, under vehicle protection products, fuel tanks and storage, drawers and cargo solutions, slide kitchen, portable fridge freezers, tents, swags and awnings, camping and touring accessories, safari snorkels, dual battery and solar systems, interior protection, and general accessories, as well as rear protection, towing, and wheel carriers. It also offers LINX, a controller that declutters the dashboard and centralizes the command of vehicle accessories by replacing classic switches, gauges, and monitors with one sleek and smart driver interface; and UHF radios, GPS, and reversing cameras. The company serves stockists, vehicle dealers, and various fleet operators, as well as owns and license ARB branded store network. The company has operations in Australia, New Zealand, the United States, Thailand, the Middle East, Europe, and the United Kingdom. ARB Corporation Limited was founded in 1975 and is based in Kilsyth, Australia.

About Martinrea International

Martinrea International Inc. engages in the design, development, and manufacturing of engineered, value-added lightweight structures and propulsion systems worldwide. It offers lightweight structure products, including knuckles/control arms/links; subframes integral/fabricated products; complex assemblies; body structures; exterior trims; and trailer hitches. The company also provides engine blocks; transmission housings; graphene and nylon coated brake lines; fluid and thermal product, such as fuel filler pipes, brake lines, and thermal management components. In addition, the company offers flexible manufacturing products comprising front and rear suspension modules, front vertical corner modules, bus frame assemblies, structural parts and fabrications, and metallic tanks and reservoirs. The company was formerly known as Royal Laser Tech Corporation and changed its name to Martinrea International Inc. in June 2002. Martinrea International Inc. was incorporated in 1987 and is headquartered in Vaughan, Canada.