Gentherm (NASDAQ:THRM) versus China Yuchai International (NYSE:CYD) Financial Analysis

Gentherm (NASDAQ:THRM) and China Yuchai International (NYSE:CYD) are both small-cap auto/tires/trucks companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Gentherm and China Yuchai International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gentherm	0	2	2	1	2.80
China Yuchai International	0	1	0	1	3.00

Gentherm presently has a consensus target price of $46.00, indicating a potential upside of 26.27%. Given Gentherm’s higher probable upside, equities analysts clearly believe Gentherm is more favorable than China Yuchai International.

Volatility and Risk

Gentherm has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500. Comparatively, China Yuchai International has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.

Institutional & Insider Ownership

97.1% of Gentherm shares are owned by institutional investors. 1.4% of Gentherm shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Gentherm and China Yuchai International”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gentherm	$1.46 billion	0.76	$64.95 million	$1.02	35.72
China Yuchai International	$2.66 billion	0.55	$45.03 million	$1.62	24.30

Gentherm has higher earnings, but lower revenue than China Yuchai International. China Yuchai International is trading at a lower price-to-earnings ratio than Gentherm, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Gentherm and China Yuchai International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gentherm	2.18%	9.90%	4.95%
China Yuchai International	N/A	N/A	N/A

Summary

Gentherm beats China Yuchai International on 11 of the 14 factors compared between the two stocks.

About Gentherm

Gentherm Incorporated designs, develops, manufactures, and sells thermal management and pneumatic comfort technologies in the United States and internationally. The company operates in two segments, Automotive and Medical. The Automotive segment offers climate comfort systems, which include seat heaters, blowers, and thermoelectric devices for variable temperature climate control seats and steering wheel heaters that are designed to provide thermal comfort to automobile passengers; integrated electronic components, such as electronic control units; and other climate comfort systems, including neck and shoulder conditioners and climate control system products for door panels, armrests, cupholders, and storage bins. It also provides battery performance solutions comprising cell connecting devices and battery cable technologies used for various types of automotive batteries; thermal management products for heating and cooling; and automotive electronic and software systems, including electronic control units for climate comfort systems, as well as for memory seat modules and other devices. In addition, it offers lumbar and massage comfort solutions, such as lumbar support, side bolster adjustment, multi-contour seats, and massage systems; automotive cable systems, including ready-made individual cables, and ready-to-install cable networks; and valve systems products consisting of applications that offer solutions in fuel management, and other valves for brake and engine systems. This segment serves light vehicle original equipment manufacturers and tier 1s, such as automotive seat manufacturers, and aftermarket seat distributors and installers. The Medical segment offers patient temperature management systems. The company was formerly known as Amerigon Incorporated and changed its name to Gentherm Incorporated in September 2012. Gentherm Incorporated was incorporated in 1991 and is headquartered in Northville, Michigan.

About China Yuchai International

China Yuchai International Limited, through its subsidiaries, manufactures, assembles, and sells diesel and natural gas engines for trucks, buses and passenger vehicles, marine, industrial, construction, agriculture, and generator set applications in the People’s Republic of China and internationally. It operates through two segments, Yuchai and HLGE. The Yuchai segment manufactures on- and off-road powertrain solutions and applications. The HLGE is engaged in hospitality and property development activities. The company provides diesel engines comprising 4- and 6-cylinder diesel engines, high horsepower marine diesel engines, and power generator engines; natural gas engines, methanol combustion engines, diesel power generators, diesel engine parts, and remanufacturing services; as well as plug in hybrid engines, range extenders, power generation powertrains, hybrid powertrains, integrated electric drive axel powertrains, and fuel cell systems. It also offers maintenance and retrofitting services. It distributes its engines directly to auto original equipment manufacturers, agents, and retailers. The company was founded in 1951 and is based in Singapore.