Analyzing American Axle & Manufacturing (NYSE:DCH) & Garrett Motion (NYSE:GTX)

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

Earnings and Valuation

This table compares American Axle & Manufacturing and Garrett Motion”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	$5.84 billion	0.14	-$19.70 million	($0.18)	-39.06
Garrett Motion	$3.54 billion	1.06	$261.00 million	$1.57	12.27

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.

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	8.12%	-38.75%	12.39%

Institutional & Insider Ownership

91.4% of American Axle & Manufacturing shares are owned by institutional investors. Comparatively, 86.3% of Garrett Motion shares are owned by institutional investors. 3.7% of American Axle & Manufacturing shares are owned by company insiders. Comparatively, 0.8% of Garrett Motion shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

American Axle & Manufacturing has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500. Comparatively, Garrett Motion has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Axle & Manufacturing	1	1	3	0	2.40
Garrett Motion	0	2	4	0	2.67

American Axle & Manufacturing currently has a consensus target price of $12.45, suggesting a potential upside of 77.10%. Garrett Motion has a consensus target price of $18.80, suggesting a potential downside of 2.44%. Given American Axle & Manufacturing’s higher possible upside, equities analysts clearly believe American Axle & Manufacturing is more favorable than Garrett Motion.

Summary

Garrett Motion beats American Axle & Manufacturing on 8 of the 14 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., together with its subsidiaries, designs, manufactures, and sells turbocharging, air and fluid compression, and high-speed electric motor technologies for original equipment manufacturers and distributors worldwide. The company offers cutting-edge technology for the mobility and industrial space, including light vehicles, commercial vehicles, and industrial applications. In addition, it provides mechanical and electrical products for turbocharging and boosting internal combustion engines, as well as compressing air for fuel cell compressors, and compressing refrigerant for electric cooling compressors. The company offers its products in the aftermarket through distributors. Garrett Motion Inc. was incorporated in 2018 and is based in Rolle, Switzerland.