Visteon Corporation (VC) vs. Superior Industries International (SUP) Critical Review

Visteon Corporation (NYSE: VC) and Superior Industries International (NYSE:SUP) are both auto/tires/trucks companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Volatility and Risk

Visteon Corporation has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Superior Industries International has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Profitability

This table compares Visteon Corporation and Superior Industries International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Visteon Corporation 4.35% 27.56% 8.67%
Superior Industries International 1.23% 9.54% 5.01%

Institutional & Insider Ownership

82.2% of Superior Industries International shares are held by institutional investors. 0.2% of Visteon Corporation shares are held by insiders. Comparatively, 1.5% of Superior Industries International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Visteon Corporation and Superior Industries International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Visteon Corporation 0 4 7 0 2.64
Superior Industries International 0 1 2 0 2.67

Visteon Corporation presently has a consensus price target of $112.60, indicating a potential downside of 5.93%. Superior Industries International has a consensus price target of $24.67, indicating a potential upside of 57.61%. Given Superior Industries International’s stronger consensus rating and higher possible upside, analysts plainly believe Superior Industries International is more favorable than Visteon Corporation.

Earnings and Valuation

This table compares Visteon Corporation and Superior Industries International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Visteon Corporation $3.17 billion 1.18 $335.00 million $4.19 28.57
Superior Industries International $778.75 million 0.50 $76.24 million $0.25 62.60

Visteon Corporation has higher revenue and earnings than Superior Industries International. Visteon Corporation is trading at a lower price-to-earnings ratio than Superior Industries International, indicating that it is currently the more affordable of the two stocks.

Dividends

Superior Industries International pays an annual dividend of $0.36 per share and has a dividend yield of 2.3%. Visteon Corporation does not pay a dividend. Superior Industries International pays out 144.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Visteon Corporation beats Superior Industries International on 11 of the 16 factors compared between the two stocks.

About Visteon Corporation

Visteon Corporation is a global automotive supplier that designs, engineers and manufactures electronics products for original equipment vehicle manufacturer (OEM), including Ford, Mazda, Nissan/Renault, General Motors, Honda BMW and Daimler. The Company operates through Electronics segment. The Electronics segment provides vehicle cockpit electronics products to customers, including instrument clusters, information displays, infotainment, audio systems, telematics solutions and head up displays. It designs and manufacturers vehicle cockpit electronics components, modules and systems. It offers a range of information displays incorporating a sleek profile, craftsmanship and touch sensors, designed to deliver high performance for the automotive market. It offers a range of audio products, including audio head units, and analog and digital radios, which deliver consumer device connectivity. It offers an automotive-grade, integrated domain controller approach, called Smartcore.

About Superior Industries International

Superior Industries International, Inc. is engaged in the design and manufacture of aluminum wheels for sale to original equipment manufacturers (OEMs). The Company supplies cast aluminum wheels to automobile and light truck manufacturers, with wheel manufacturing operations in the United States and Mexico. The Company offers wheels in a range of finishes, which include Bright Machined, Polished Face with Painted Window, Fully Painted, Premium Paint, Polished, Chrome Clad and Mirror Finish Ultra Bright Machining. The Company’s products, which are manufactured in its North American facilities, are delivered primarily to automotive assembly operations in North America for global OEMs. Its OEM aluminum wheels are primarily sold for factory installation, as either optional or standard equipment, on various vehicle models. As of December 31, 2015, the Company operated five manufacturing facilities in the United States and Mexico.

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