Critical Review: Ferrari (NYSE:RACE) vs. Denso (OTCMKTS:DNZOY)

Ferrari (NYSE:RACE) and Denso (OTCMKTS:DNZOY) are both large-cap auto/tires/trucks companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, dividends, institutional ownership, valuation, profitability and analyst recommendations.

Valuation and Earnings

This table compares Ferrari and Denso”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferrari	$7.23 billion	16.11	$1.65 billion	$9.69	49.56
Denso	$47.03 billion	0.91	$2.77 billion	$0.95	15.51

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

Volatility & Risk

Ferrari has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, Denso has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Ferrari and Denso, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferrari	1	1	8	0	2.70
Denso	0	3	0	0	2.00

Ferrari currently has a consensus price target of $531.67, indicating a potential upside of 10.71%. Given Ferrari’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Ferrari is more favorable than Denso.

Profitability

This table compares Ferrari and Denso’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ferrari	22.95%	45.41%	16.72%
Denso	5.62%	7.67%	4.89%

Summary

Ferrari beats Denso on 10 of the 12 factors compared between the two stocks.

About Ferrari

Ferrari N.V., through its subsidiaries, engages in design, engineering, production, and sale of luxury performance sports cars worldwide. The company offers range, special series, Icona, and supercars; limited edition supercars and one-off cars; and track cars. It also provides racing cars, and spare parts and engines, as well as after sales, repair, maintenance, and restoration services for cars; and licenses its Ferrari brand to various producers and retailers of luxury and lifestyle goods. In addition, the company operates Ferrari museums in Modena and Maranello; Il Cavallino restaurant in Maranello; and theme parks in Abu Dhabi and Spain. Further, it provides direct or indirect finance and leasing services to retail clients and dealers; manages racetracks; develops and sells a range of apparel and accessories; and operates franchised and owned Ferrari stores. The company also sells its products through a network of authorized dealers operating points of sale, as well as through its website. The company was founded in 1947 and is headquartered in Maranello, Italy.

About Denso

DENSO Corporation engages in the manufacture and sale of automotive parts in Japan, rest of Asia, North America, Europe, and internationally. The company offers air-conditioning systems, including thermal management heat pump system, heat pump air-conditioning systems, refrigerant products, personal heating and cooling devices, air quality system, heat exchangers, bus air-conditioning systems, automotive freezers, and cooling products, as well as heating, ventilation, and air-conditioning units. It also provides gasoline, diesel, hybrid, electric vehicle, and fuel cell vehicle power-train systems; and safety and cockpit systems, such as driving environment recognition, vehicle dynamic control, collision safety, visibility support, cockpit information, and information security systems, as well as other products. In addition, the company offers automotive service parts and accessories, comprising spark plugs, oil and cabin air filters, wiper blades, air filter elements, starters, alternators, compressors, oxygen sensors, fuel pumps, air conditioner service parts, radiators, condensers, ion generators, air conditioners for busses and construction vehicles, and truck refrigeration products, as well as refrigerant recovery, recycling, and charging machines; and repair and support products and services. Further, it provides industrial solutions for factories in automotive parts production; agricultural solutions, including Profarm Controller, a climate control system for greenhouse and horticulture solutions; and household air conditioning equipment and industrial systems. The company was incorporated in 1949 and is headquartered in Kariya, Japan.