Aptiv (APTV) and American Axle (AXL) Critical Survey

Aptiv (NYSE: APTV) and American Axle (NYSE:AXL) are both business services companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Risk & Volatility

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Aptiv has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500. Comparatively, American Axle has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Dividends

Aptiv pays an annual dividend of $0.88 per share and has a dividend yield of 0.9%. American Axle does not pay a dividend. Aptiv pays out 19.0% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Aptiv and American Axle’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aptiv $12.88 billion 2.00 $1.36 billion $4.64 20.98
American Axle $6.27 billion 0.29 $337.10 million $3.75 4.30

Aptiv has higher revenue and earnings than American Axle. American Axle is trading at a lower price-to-earnings ratio than Aptiv, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

90.0% of Aptiv shares are held by institutional investors. 0.3% of Aptiv shares are held by company insiders. Comparatively, 1.0% of American Axle shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Aptiv and American Axle’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aptiv 8.44% 44.95% 12.21%
American Axle 4.92% 28.46% 5.30%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Aptiv and American Axle, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aptiv 1 2 19 0 2.82
American Axle 2 2 7 0 2.45

Aptiv presently has a consensus target price of $99.33, suggesting a potential upside of 2.05%. American Axle has a consensus target price of $19.50, suggesting a potential upside of 20.97%. Given American Axle’s higher possible upside, analysts clearly believe American Axle is more favorable than Aptiv.

Summary

Aptiv beats American Axle on 13 of the 16 factors compared between the two stocks.

About Aptiv

Aptiv PLC, together with its subsidiaries, designs and manufacturers vehicle components, and provides electrical, electronic, and safety technology solutions to the automotive and commercial vehicle markets worldwide. It operates through two segments, Signal and Power Solutions; and Advanced Safety and User Experience. The Signal and Power Solutions segment designs, manufactures, and assembles vehicle's electrical architecture, including engineered component products, connectors, wiring assemblies and harnesses, cable management, electrical centers, and hybrid high voltage and safety distribution systems. The Advanced Safety and User Experience segment provides critical components, systems, and software development for passenger safety, security, comfort, and vehicle operation, including body controls, infotainment and connectivity systems, passive and active safety electronics, autonomous driving software and technologies, displays, and systems integration. The company was formerly known as Delphi Automotive PLC and changed its name to Aptiv PLC in December 2017. Aptiv PLC is based in Gillingham, the United Kingdom.

About American Axle

American Axle & Manufacturing Holdings, Inc., together with its subsidiaries, designs, engineers, validates, and manufactures driveline, metal forming, powertrain, and casting products. The company's Driveline segment offers axles, driveshafts, power transfer units, rear drive modules, transfer cases, and electric and hybrid driveline products and systems for light trucks, sport utility vehicles, crossover vehicles, passenger cars, and commercial vehicles. Its Metal Forming segment provides axle and transmission shafts, ring and pinion gears, differential gears, transmission gears and shafts, and suspension components for original equipment manufacturers and automotive suppliers. The company's Powertrain segment offers transmission module and differential assemblies, transmission valve bodies, connecting rod forging and assemblies, torsional vibration dampers, and variable valve timing products for original equipment manufacturers and automotive suppliers. Its Casting segment produces thin wall castings and high strength ductile iron castings, as well as differential cases, steering knuckles, control arms, brackets, and turbo charger housings for the light vehicle, commercial, and industrial markets. The company has operations in the United States, Canada, Mexico, South America, China, Europe, other Asian countries, and internationally. American Axle & Manufacturing Holdings, Inc. was founded in 1994 and is headquartered in Detroit, Michigan.