Critical Comparison: Harman International Industries (HAR) & Delphi Automotive PLC (DLPH)

Harman International Industries (NYSE: HAR) and Delphi Automotive PLC (NYSE:DLPH) are both mid-cap auto, truck & motorcycle parts – nec companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.

Valuation and Earnings

This table compares Harman International Industries and Delphi Automotive PLC’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Harman International Industries N/A N/A N/A $5.06 22.04
Delphi Automotive PLC $16.66 billion 1.57 $1.26 billion $5.13 19.13

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

Volatility & Risk

Harman International Industries has a beta of 1.55, meaning that its stock price is 55% more volatile than the S&P 500. Comparatively, Delphi Automotive PLC has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500.

Dividends

Harman International Industries pays an annual dividend of $1.40 per share and has a dividend yield of 1.3%. Delphi Automotive PLC pays an annual dividend of $1.16 per share and has a dividend yield of 1.2%. Harman International Industries pays out 27.7% of its earnings in the form of a dividend. Delphi Automotive PLC pays out 22.6% 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. Harman International Industries has raised its dividend for 6 consecutive years. Harman International Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Harman International Industries and Delphi Automotive PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Harman International Industries 5.12% 15.69% 6.40%
Delphi Automotive PLC 8.00% 57.92% 14.04%

Analyst Recommendations

This is a summary of current recommendations and price targets for Harman International Industries and Delphi Automotive PLC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Harman International Industries 0 6 0 0 2.00
Delphi Automotive PLC 1 4 13 0 2.67

Harman International Industries currently has a consensus price target of $111.67, indicating a potential upside of 0.15%. Delphi Automotive PLC has a consensus price target of $105.24, indicating a potential upside of 7.21%. Given Delphi Automotive PLC’s stronger consensus rating and higher probable upside, analysts clearly believe Delphi Automotive PLC is more favorable than Harman International Industries.

Institutional and Insider Ownership

85.8% of Harman International Industries shares are owned by institutional investors. Comparatively, 90.6% of Delphi Automotive PLC shares are owned by institutional investors. 0.9% of Harman International Industries shares are owned by company insiders. Comparatively, 0.3% of Delphi Automotive PLC shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Delphi Automotive PLC beats Harman International Industries on 10 of the 14 factors compared between the two stocks.

Harman International Industries Company Profile

Harman International Industries, Incorporated is engaged in the designing and engineering of connected products and solutions for automakers, consumers and enterprises, including connected car systems, audio and visual products, enterprise automation solutions and connected services. The Company’s segments include Connected Car, Lifestyle Audio, Professional Solutions, Connected Services and Other. The Connected Car segment designs, manufactures and markets connected car systems for vehicle applications. The Lifestyle Audio segment designs, manufactures and markets car audio systems. The Professional Solutions segment designs, manufactures and markets a range of audio, lighting, video and control, and automation solutions for entertainment and enterprise applications The Connected Services segment includes the operations of Symphony Teleca Corporation, Red Bend Ltd. and its automotive services businesses. Its brands include AKG, AMX, Crown, Infinity, JBL, Revel, Soundcraft and Studer.

Delphi Automotive PLC Company Profile

Delphi Automotive PLC is a global technology company serving the automotive sector. The Company designs and manufactures vehicle components, and provides electrical and electronic, powertrain and active safety technology solutions to the global automotive and commercial vehicle markets. The Company’s segments include Electrical/Electronic Architecture, Powertrain Systems, and Electronics and Safety. The Electrical/Electronic Architecture segment provides complete design of the vehicle’s electrical architecture, including connectors, wiring assemblies and harnesses, electrical centers and hybrid high voltage and safety distribution systems. The Powertrain Systems segment offers products for engine management systems (EMS). The Electronics and Safety segment offers a range of electronic and safety equipment and software in the areas of controls, security, infotainment, communications and safety systems.

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