Comparing Denso (OTCMKTS:DNZOY) and Strattec Security (NASDAQ:STRT)

Denso (OTCMKTS:DNZOY) and Strattec Security (NASDAQ:STRT) are both auto/tires/trucks companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Insider and Institutional Ownership

68.9% of Strattec Security shares are held by institutional investors. 3.9% of Strattec Security shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Denso has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Strattec Security has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Denso and Strattec Security, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denso	0	3	0	0	2.00
Strattec Security	1	0	1	0	2.00

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Denso	5.62%	7.67%	4.89%
Strattec Security	3.31%	8.95%	5.58%

Earnings and Valuation

This table compares Denso and Strattec Security”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Denso	$47.03 billion	0.91	$2.77 billion	$0.95	15.43
Strattec Security	$565.07 million	0.52	$18.68 million	$4.57	15.57

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

Summary

Strattec Security beats Denso on 8 of the 12 factors compared between the two stocks.

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.

About Strattec Security

Strattec Security Corporation designs, develops, manufactures, and markets automotive access control products under the VAST Automotive Group brand primarily in North America. The company provides mechanical and electronically enhanced locks and keys, passive entry passive start systems, steering column and instrument panel ignition lock housings, latches, power sliding side door systems, power tailgate and lift gate systems, power deck lid systems, door handles, and related products. It also offers full service and aftermarket support services for its products. The company markets its products to automotive and light truck original equipment manufacturers, as well as other transportation-related manufacturers; and through wholesale distributors, other marketers, and users of component parts, as well as certain products to non-automotive commercial customers. It also exports its products to Europe, South America, Korea, China, and India. Strattec Security Corporation was founded in 1908 and is headquartered in Milwaukee, Wisconsin.