Analyzing Tenneco (TEN) and China Automotive Systems (CAAS)

Tenneco (NYSE: TEN) and China Automotive Systems (NASDAQ:CAAS) are both auto/tires/trucks companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.

Earnings & Valuation

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This table compares Tenneco and China Automotive Systems’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tenneco $9.27 billion 0.26 $207.00 million $6.89 6.88
China Automotive Systems $499.06 million 0.30 -$19.34 million $0.64 7.27

Tenneco has higher revenue and earnings than China Automotive Systems. Tenneco is trading at a lower price-to-earnings ratio than China Automotive Systems, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

95.3% of Tenneco shares are owned by institutional investors. Comparatively, 6.3% of China Automotive Systems shares are owned by institutional investors. 3.0% of Tenneco shares are owned by company insiders. Comparatively, 62.2% of China Automotive Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Tenneco has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500. Comparatively, China Automotive Systems has a beta of 2.1, suggesting that its share price is 110% more volatile than the S&P 500.

Dividends

Tenneco pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. China Automotive Systems does not pay a dividend. Tenneco pays out 14.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Tenneco and China Automotive Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tenneco 0 6 4 0 2.40
China Automotive Systems 0 0 0 0 N/A

Tenneco currently has a consensus price target of $64.10, suggesting a potential upside of 35.29%. Given Tenneco’s higher possible upside, research analysts plainly believe Tenneco is more favorable than China Automotive Systems.

Profitability

This table compares Tenneco and China Automotive Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tenneco 2.10% 50.58% 7.43%
China Automotive Systems -4.03% 5.83% 2.69%

Summary

Tenneco beats China Automotive Systems on 10 of the 15 factors compared between the two stocks.

About Tenneco

Tenneco Inc. designs, manufactures, and distributes clean air and ride performance products and systems for light vehicle, commercial truck, off-highway, and other vehicle applications worldwide. The company offers various vehicle emission control products and systems, including catalytic converters and diesel oxidation catalysts, diesel particulate filters, burner systems, lean nitrogen oxide (NOx) traps, hydrocarbon vaporizers and injectors, selective catalytic reduction (SCR) systems, SCR-coated diesel particulate filters systems, urea dosing systems, four-way catalysts, alternative NOx reduction technologies, mufflers and resonators, fabricated exhaust manifolds, pipes, hydroformed assemblies, elastomeric hangers and isolators, and after treatment control units. It also provides ride performance products and systems, such as shock absorbers; struts; vibration control components; kinetic suspension technology systems, dual-mode suspension solutions, semi-active and active suspension systems, and kinetic H2/continuously variable semi-active continuously variable semi active suspension systems; and other ride performance products comprising load assist products, springs, steering stabilizers, adjustable suspension systems, suspension kits, and modular assemblies. The company offers its products to original equipment vehicle designers and manufacturers, and repair and replacement markets under the Monroe, Kinetic, Fric-Rot, Gas-Matic, Sensa-Trac, OESpectrum, Quick-Strut, Walker, Fonos, XNOx, Mega-Flow, Quiet-Flow, Tru-Fit, DynoMax, Thrush, Rancho, Clevite Elastomers, and Axios brand names. The company was formerly known as Tenneco Automotive Inc. and changed its name to Tenneco Inc. in 2005. Tenneco Inc. was founded in 1987 and is headquartered in Lake Forest, Illinois.

About China Automotive Systems

China Automotive Systems, Inc., through its subsidiaries, manufactures and sells automotive systems and components in the People's Republic of China, the United States, and internationally. It produces rack and pinion power steering gears for cars and light duty vehicles; integral power steering gears for heavy-duty vehicles; power steering parts for light duty vehicles; sensor modules; automobile steering systems and columns; and automobile electronic systems and parts. The company is also involved in the marketing of automotive parts in North America, as well as the provision of after sales, and research and development support services. In addition, it imports and sells automotive parts in Brazil. The company primarily sells its products to the original equipment manufacturing customers. The company was founded in 2003 and is headquartered in Jing Zhou, the People's Republic of China.