American Axle & Manufacturing (NYSE:DCH – Get Free Report) and Garrett Motion (OTCMKTS:GTXMQ – Get Free Report) are both small-cap auto/tires/trucks companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.
Profitability
This table compares American Axle & Manufacturing and Garrett Motion’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Axle & Manufacturing | -0.34% | 10.00% | 1.17% |
| Garrett Motion | 6.65% | -6.89% | 6.44% |
Insider & Institutional Ownership
91.4% of American Axle & Manufacturing shares are owned by institutional investors. Comparatively, 12.7% of Garrett Motion shares are owned by institutional investors. 3.7% of American Axle & Manufacturing shares are owned by insiders. Comparatively, 0.9% of Garrett Motion shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Axle & Manufacturing | 1 | 1 | 0 | 0 | 1.50 |
| Garrett Motion | 0 | 0 | 0 | 0 | 0.00 |
Given Garrett Motion’s higher possible upside, analysts plainly believe Garrett Motion is more favorable than American Axle & Manufacturing.
Earnings and Valuation
This table compares American Axle & Manufacturing and Garrett Motion”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Axle & Manufacturing | $5.84 billion | 0.21 | -$19.70 million | ($0.18) | -28.82 |
| Garrett Motion | $3.25 billion | 0.00 | $313.00 million | $3.86 | N/A |
Garrett Motion has lower revenue, but higher earnings than American Axle & Manufacturing. American Axle & Manufacturing is trading at a lower price-to-earnings ratio than Garrett Motion, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
American Axle & Manufacturing has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Garrett Motion has a beta of 2.55, meaning that its stock price is 155% more volatile than the S&P 500.
Summary
Garrett Motion beats American Axle & Manufacturing on 7 of the 12 factors compared between the two stocks.
About American Axle & Manufacturing
American Axle & Manufacturing Holdings, Inc. is a leading supplier of driveline and drivetrain systems, modules and components for the light vehicle market world wide. It manufactures Driveline and Metal Forming technologies to support electric, hybrid and internal combustion vehicles. It’s the primary supplier of driveline components to its major customers include General Motors, Stellantis and Ford. It also sells various products to Ford & Stellantis from Metal Forming segment. It has the 2 operating segments. Driveline segment comprises front & rear axles, driveshafts, differential assemblies, clutch modules, balance shaft systems, disconnecting driveline technology, and electric & hybrid driveline products and systems for light trucks, SUVs, crossover vehicles, passenger cars and commercial vehicles. Metal Forming segment comprises axle & transmission shafts, ring and pinion gears, differential gears & assemblies, connecting rods and variable valve timing products for OEM and Tier 1 automotive suppliers.
About Garrett Motion
Garrett Motion, Inc. provides automobile technology. The firm engages in the designing, manufacturing and selling engineered turbocharger, electric-boosting technologies for light and commercial vehicle original equipment manufacturers. It offers light vehicle gasoline, light vehicle diesel and commercial vehicle turbochargers that enhance vehicle performance, fuel economy and drivability. The company was founded on March 14, 2018 and is headquartered in Rolle, Switzerland.
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