Critical Contrast: Autoliv (NYSE:ALV) & Federal Screw Works (OTCMKTS:FSCR)

Federal Screw Works (OTCMKTS:FSCR) and Autoliv (NYSE:ALV) are both auto/tires/trucks companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares Federal Screw Works and Autoliv’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Federal Screw Works	1.66%	N/A	N/A
Autoliv	7.09%	31.22%	9.20%

Insider and Institutional Ownership

69.6% of Autoliv shares are held by institutional investors. 46.2% of Federal Screw Works shares are held by company insiders. Comparatively, 0.2% of Autoliv shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Federal Screw Works and Autoliv, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Federal Screw Works	0	0	0	0	0.00
Autoliv	0	6	10	2	2.78

Autoliv has a consensus target price of $128.00, suggesting a potential upside of 4.11%. Given Autoliv’s stronger consensus rating and higher possible upside, analysts plainly believe Autoliv is more favorable than Federal Screw Works.

Earnings and Valuation

This table compares Federal Screw Works and Autoliv”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Federal Screw Works	$97.55 million	0.14	$1.62 million	$1.18	8.22
Autoliv	$10.61 billion	0.88	$647.00 million	$9.68	12.70

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

Risk & Volatility

Federal Screw Works has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Autoliv has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500.

Summary

Autoliv beats Federal Screw Works on 14 of the 15 factors compared between the two stocks.

About Federal Screw Works

Federal Screw Works manufactures and sells industrial component parts primarily to the automobile industry in the United States. It operates through Big Rapids, Romulus, Traverse City, and Novex Tool divisions. The company offers cold formed and machined pins, including piston pins, planetary and differential gear shafts, and oil pump and steering shafts for the automotive, refrigeration, and small engine industries; and cold formed machined products, such as suspension ball studs, fluid line adapters, and precision formed and machined valve lifter bodies to the automotive industry. It also provides close tolerance machined products that are used in transmission valves, ball joints, steering gear bulkhead assemblies, torque converter hubs, and piston pins; and engineered nut products comprising prevailing torque nuts, free spinning nuts, slotted nuts, nut retainer assemblies, and nut washer assemblies to the automotive industry. In addition, the company offers cold form tooling products, which include assemblies, sleeves, dies, and punches; and complex cold formed parts, such as tie rod housings, valve lifter bodies, and suspension components. Federal Screw Works was founded in 1917 and is based in Romulus, Michigan.

About Autoliv

Autoliv, Inc., through its subsidiaries, develops, manufactures, and supplies passive safety systems to the automotive industry in Europe, the Americas, China, Japan, and rest of Asia. It offers passive safety systems, including modules and components for frontal-impact airbag protection systems, side-impact airbag protection systems, seatbelts, steering wheels, and inflator technologies. The company also provides mobility safety solutions, such as pedestrian protection, battery cut-off switches, connected safety services, and safety solutions for riders of powered two wheelers. It primarily serves car manufacturers. Autoliv, Inc. was founded in 1953 and is headquartered in Stockholm, Sweden.