VALEO/S (OTCMKTS:VLEEY) and Lear (NYSE:LEA) are both mid-cap auto/tires/trucks companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.
Risk & Volatility
VALEO/S has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, Lear has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500.
Earnings & Valuation
This table compares VALEO/S and Lear’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|VALEO/S||$22.47 billion||0.29||$644.83 million||$1.48||9.16|
|Lear||$21.15 billion||0.39||$1.15 billion||$18.22||7.34|
Lear has lower revenue, but higher earnings than VALEO/S. Lear is trading at a lower price-to-earnings ratio than VALEO/S, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
0.2% of VALEO/S shares are held by institutional investors. Comparatively, 89.4% of Lear shares are held by institutional investors. 0.4% of Lear shares 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.
This table compares VALEO/S and Lear’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent recommendations and price targets for VALEO/S and Lear, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Lear has a consensus price target of $175.08, suggesting a potential upside of 30.95%. Given Lear’s stronger consensus rating and higher probable upside, analysts clearly believe Lear is more favorable than VALEO/S.
VALEO/S pays an annual dividend of $0.56 per share and has a dividend yield of 4.1%. Lear pays an annual dividend of $3.00 per share and has a dividend yield of 2.2%. VALEO/S pays out 37.8% of its earnings in the form of a dividend. Lear pays out 16.5% 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. Lear has raised its dividend for 8 consecutive years.
Lear beats VALEO/S on 14 of the 17 factors compared between the two stocks.
Valeo SA designs, produces, and sells components, integrated systems, and modules for the automotive sector worldwide. The company operates through four segments: Comfort & Driving Assistance Systems, Powertrain Systems, Thermal Systems, and Visibility Systems. It offers parking and driving assistance products, such as ultrasonic sensors, radars, and cameras to detect obstacles around vehicles; intuitive control products; and a range of connectivity solutions from short-range to long-range connectivity, as well as develops systems that enable the integration of applications, such as car sharing services and remote parking systems. The company also manufactures powertrain systems, including electric powertrain systems for the electric cars; products that enable the automation of transmissions to reduce fuel consumption and enhance driving comfort; and clean engines for vehicles. In addition, it designs and manufactures systems, modules, and components to optimize thermal management of vehicles and passenger comfort in the cabin. Further, the company designs and produces lighting and wiper systems for drivers in all weather conditions. In addition, it offers original equipment spares to auto manufacturers and the independent aftermarket; replacement parts and accessories for passenger cars and commercial vehicles; air conditioning systems for buses; cabin 3D image processing software; hydraulic actuators; and torque converters. Valeo SA was founded in 1923 and is headquartered in Paris, France.
Lear Corporation designs, develops, engineers, manufactures, assembles, and supplies automotive seating, and electrical distribution systems and related components for automotive original equipment manufacturers worldwide. It operates in two segments, Seating and E-Systems. The Seating segment offers leather and fabric products, seat trim covers, recliner mechanisms, seat tracks and foams, seat structures and mechanisms, and headrests for automobiles and light trucks, compact cars, and sport utility vehicles; and heating and cooling systems. The E-Systems segment offers electrical distribution systems that route electrical signals and manage electrical power within the vehicle for traditional vehicle architectures, as well as high power and hybrid electric systems. This segment's products comprise wire harnesses, terminals and connectors, and junction boxes; and electronic control modules, such as body control modules, smart junction boxes, gateway and wireless control modules, lighting control modules, and audio domain controllers and amplifiers. It also provides electrification products comprising charging systems that include onboard charging modules, cord set charging equipment, and wireless charging systems; battery electronics, which comprise battery disconnect units, cell monitoring supervisory systems, and integrated total battery control modules; and other power management modules, including converter and inverter systems. In addition, this segment offers cybersecurity software; EXO advanced vehicle positioning for automated and autonomous driving applications; roadside modules that communicate real-time traffic information; and cellular protocols for vehicle connectivity, as well as Connexus connectivity products. Further, it provides wireless systems, such as passive entry, remote keyless entry, and dual range/function remote keyless entry systems. The company was founded in 1917 and is headquartered in Southfield, Michigan.
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