SORL Auto Parts (NASDAQ: SORL) and Tower International (NYSE:TOWR) are both small-cap auto/tires/trucks companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitabiliy and institutional ownership.
Institutional & Insider Ownership
6.3% of SORL Auto Parts shares are held by institutional investors. Comparatively, 89.4% of Tower International shares are held by institutional investors. 58.9% of SORL Auto Parts shares are held by insiders. Comparatively, 6.2% of Tower International shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This is a summary of recent ratings and target prices for SORL Auto Parts and Tower International, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SORL Auto Parts||0||0||1||0||3.00|
SORL Auto Parts currently has a consensus target price of $6.00, indicating a potential downside of 14.16%. Tower International has a consensus target price of $33.25, indicating a potential upside of 40.89%. Given Tower International’s higher possible upside, analysts plainly believe Tower International is more favorable than SORL Auto Parts.
This table compares SORL Auto Parts and Tower International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SORL Auto Parts||8.80%||15.84%||8.74%|
Risk & Volatility
SORL Auto Parts has a beta of 1.57, indicating that its share price is 57% more volatile than the S&P 500. Comparatively, Tower International has a beta of 2.59, indicating that its share price is 159% more volatile than the S&P 500.
Valuation & Earnings
This table compares SORL Auto Parts and Tower International’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|SORL Auto Parts||$292.18 million||0.46||$39.23 million||$1.33||5.26|
|Tower International||$1.91 billion||0.25||$185.76 million||$3.42||6.90|
Tower International has higher revenue and earnings than SORL Auto Parts. SORL Auto Parts is trading at a lower price-to-earnings ratio than Tower International, indicating that it is currently the more affordable of the two stocks.
Tower International pays an annual dividend of $0.44 per share and has a dividend yield of 1.9%. SORL Auto Parts does not pay a dividend. Tower International pays out 12.9% of its earnings in the form of a dividend.
Tower International beats SORL Auto Parts on 10 of the 16 factors compared between the two stocks.
About SORL Auto Parts
SORL Auto Parts, Inc., through its interests in the Ruili Group Ruian Auto Parts Co., Ltd., a Sino-foreign joint venture (Joint Venture), develops, manufactures and distributes automotive brake systems and other safety related auto parts to automotive original equipment manufacturers (OEMs), and the related aftermarket both in China and abroad. The Company operates through two segments: Commercial Vehicle Brake Systems and Passenger Vehicle Brake Systems. The Company’s products are principally used in different types of commercial vehicles, such as trucks and buses, and include a range of products covering approximately 65 categories and over 2,000 specifications in automotive brake systems. The Company sells its products to approximately 70 vehicle manufacturers, including all of the primary truck manufacturers in China.
About Tower International
Tower International, Inc. is a global manufacturer of engineered automotive structural metal components and assemblies primarily serving original equipment manufacturers (OEMs). The Company’s product portfolio includes body-structure stampings, frame and other chassis structures, and welded assemblies for small and large cars, crossovers, pickups and sport utility vehicles (SUVs). The Company offers body structures and assemblies, including structural metal components, such as body pillars, roof rails and side sills. The Company also offers Class A surfaces and assemblies, which are components of the exterior skin of the vehicle, such as body sides, hoods, doors, fenders and pickup truck boxes. The Company’s lower vehicle frames and structures include chassis structures. Its products include pickup truck and SUV full frames, automotive engine and rear suspension cradles, floor pan components and cross members that form the basic lower body structure of the vehicle.
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