Financial Comparison: BorgWarner (BWA) versus China XD Plastics Company Limited (CXDC)

BorgWarner (NYSE: BWA) and China XD Plastics Company Limited (NASDAQ:CXDC) are both auto/tires/trucks companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, valuation and risk.

Analyst Recommendations

This is a summary of recent recommendations for BorgWarner and China XD Plastics Company Limited, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BorgWarner 3 8 4 0 2.07
China XD Plastics Company Limited 0 0 0 0 N/A

BorgWarner currently has a consensus price target of $43.36, suggesting a potential downside of 11.08%. Given BorgWarner’s higher probable upside, analysts clearly believe BorgWarner is more favorable than China XD Plastics Company Limited.

Risk & Volatility

BorgWarner has a beta of 1.73, meaning that its stock price is 73% more volatile than the S&P 500. Comparatively, China XD Plastics Company Limited has a beta of 2.47, meaning that its stock price is 147% more volatile than the S&P 500.

Dividends

BorgWarner pays an annual dividend of $0.56 per share and has a dividend yield of 1.1%. China XD Plastics Company Limited does not pay a dividend. BorgWarner pays out 62.9% of its earnings in the form of a dividend. China XD Plastics Company Limited has raised its dividend for 2 consecutive years.

Valuation & Earnings

This table compares BorgWarner and China XD Plastics Company Limited’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BorgWarner $9.27 billion 1.11 $1.54 billion $0.89 54.79
China XD Plastics Company Limited $1.26 billion 0.18 $201.53 million $1.45 3.21

BorgWarner has higher revenue and earnings than China XD Plastics Company Limited. China XD Plastics Company Limited is trading at a lower price-to-earnings ratio than BorgWarner, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

91.1% of BorgWarner shares are owned by institutional investors. Comparatively, 11.4% of China XD Plastics Company Limited shares are owned by institutional investors. 0.7% of BorgWarner shares are owned by insiders. Comparatively, 66.3% of China XD Plastics Company Limited shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares BorgWarner and China XD Plastics Company Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BorgWarner 2.06% 20.75% 8.17%
China XD Plastics Company Limited 7.52% 16.31% 5.16%

Summary

BorgWarner beats China XD Plastics Company Limited on 10 of the 16 factors compared between the two stocks.

BorgWarner Company Profile

BorgWarner Inc. is engaged in providing technology solutions for combustion, hybrid and electric vehicles. The Company’s segments include Engine and Drivetrain. The Engine segment’s products include turbochargers, timing devices and chains, emissions systems and thermal systems. The Engine segment develops and manufactures products for gasoline and diesel engines, and alternative powertrains. The Drivetrain segment’s products include transmission components and systems, all-wheel drive (AWD) torque transfer systems and rotating electrical devices. The Company’s products are manufactured and sold across the world, primarily to original equipment manufacturers (OEMs) of light vehicles (passenger cars, sport-utility vehicles (SUVs), vans and light trucks). The Company’s products are also sold to other OEMs of commercial vehicles (medium-duty trucks, heavy-duty trucks and buses) and off-highway vehicles (agricultural and construction machinery and marine applications.

China XD Plastics Company Limited Company Profile

China XD Plastics Company Limited (China XD) is a specialty chemical company. The Company is engaged in the research, development, manufacture and sale of modified plastics for automotive applications in China and to a lesser extent, in Dubai, the United Arab Emirates (UAE). The Company operates in the modified plastics segment. Through its subsidiaries, Heilongjiang Xinda Enterprise Group Company Limited (HLJ Xinda Group) and AL Composites Materials FZE (Dubai Composites), the Company manufactures and sells polymer composite materials (including modified plastics), for automotive applications. The Company’s products categories include Modified Polypropylene (PP), Modified Acrylonitrile Butadiene Styrene (ABS), Modified Polyamide 66 (PA66), Modified Polyamide 6 (PA6), Modified Polyoxymethylenes (POM), Modified Polyphenylene Oxide (PPO), Plastic Alloy, Modified Polyphenylene Sulfide (PPS), Modified Polyimide (PI), Modified Polylactic Acid (PLA) and Poly Ether Ether Ketone (PEEK).

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