Head-To-Head Analysis: American Axle & Manufacturing (NYSE:AXL) vs. Denso (OTCMKTS:DNZOY)

American Axle & Manufacturing (NYSE:AXL) and Denso (OTCMKTS:DNZOY) are both auto/tires/trucks companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Analyst Recommendations

This is a summary of current ratings and price targets for American Axle & Manufacturing and Denso, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Axle & Manufacturing	0	5	3	0	2.38
Denso	0	3	0	0	2.00

American Axle & Manufacturing currently has a consensus price target of $7.17, indicating a potential upside of 11.54%. Given American Axle & Manufacturing’s stronger consensus rating and higher probable upside, research analysts plainly believe American Axle & Manufacturing is more favorable than Denso.

Institutional & Insider Ownership

91.4% of American Axle & Manufacturing shares are owned by institutional investors. 2.1% of American Axle & Manufacturing shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

American Axle & Manufacturing has a beta of 1.6, meaning that its stock price is 60% more volatile than the S&P 500. Comparatively, Denso has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Profitability

This table compares American Axle & Manufacturing and Denso’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Axle & Manufacturing	0.73%	8.90%	1.05%
Denso	5.62%	7.67%	4.89%

Earnings and Valuation

This table compares American Axle & Manufacturing and Denso”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Axle & Manufacturing	$5.83 billion	0.13	$33.80 million	$0.33	19.47
Denso	$47.03 billion	0.81	$2.77 billion	$0.86	15.24

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

Summary

American Axle & Manufacturing beats Denso on 8 of the 14 factors compared between the two stocks.

About American Axle & Manufacturing

American Axle & Manufacturing Holdings, Inc. engages in the manufacture, engineering, design, and validation of driveline systems and related components. It operates through the Driveline and Metal Forming segments. The Driveline segment consists of axles, drive shafts, power transfer units, rear drive modules, and electric and hybrid driveline products and systems for light trucks, service utility vehicles, crossover vehicles, passenger cars, and commercial vehicles. The Metal Forming segment manufactures axle shafts, ring and pinion gears, differential gears, transmission gears, and shafts and suspension components for original equipment manufacturers (OEMs), and Tier 1 automotive suppliers. The company was founded by Richard E. Dauch on March 1, 1994, and is headquartered in Detroit, MI.

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.