Analyzing SPX (SPXC) and General Motors (GM)

SPX (NYSE: SPXC) and General Motors (NYSE:GM) are both auto/tires/trucks companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Risk and Volatility

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SPX has a beta of 1.57, suggesting that its share price is 57% more volatile than the S&P 500. Comparatively, General Motors has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500.

Earnings & Valuation

This table compares SPX and General Motors’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SPX $1.43 billion 0.95 $89.30 million $2.02 15.61
General Motors $145.59 billion 0.36 -$3.86 billion ($2.89) -12.76

SPX has higher earnings, but lower revenue than General Motors. General Motors is trading at a lower price-to-earnings ratio than SPX, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

86.7% of SPX shares are owned by institutional investors. Comparatively, 73.5% of General Motors shares are owned by institutional investors. 0.6% of SPX shares are owned by company insiders. Comparatively, 0.0% of General Motors 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for SPX and General Motors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SPX 0 1 0 0 2.00
General Motors 2 11 9 1 2.39

SPX currently has a consensus price target of $32.00, indicating a potential upside of 1.46%. General Motors has a consensus price target of $44.57, indicating a potential upside of 20.82%. Given General Motors’ stronger consensus rating and higher possible upside, analysts plainly believe General Motors is more favorable than SPX.

Dividends

General Motors pays an annual dividend of $1.52 per share and has a dividend yield of 4.1%. SPX does not pay a dividend. General Motors pays out -52.6% of its earnings in the form of a dividend.

Profitability

This table compares SPX and General Motors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SPX 6.26% 31.70% 4.02%
General Motors -2.58% 22.86% 4.30%

Summary

General Motors beats SPX on 9 of the 17 factors compared between the two stocks.

About SPX

SPX Corporation is a global supplier of infrastructure equipment. The Company operates through three segments: HVAC; Detection and Measurement, and Engineered Solutions. The HVAC solutions offered by its businesses include package cooling towers, residential and commercial boilers, heating and ventilation products. Its detection and measurement product lines encompass underground pipe and cable locators, and inspection equipment. Within its power platform, it is a manufacturer of medium and large power transformers, as well as equipment for various types of power plant, including cooling equipment, heat exchangers and pollution control systems. As of December 31, 2016, the Company had operations in approximately 15 countries.

About General Motors

General Motors Company designs, builds and sells cars, trucks, crossovers and automobile parts. The Company’s segments include GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO), GM South America (GMSA) and General Motors Financial Company, Inc. (GM Financial). The Company provides automotive financing services through General Motors Financial Company, Inc. The Company develops, manufactures and/or markets vehicles in North America under the brands, including Buick, Cadillac, Chevrolet and GMC. The Company also develops, manufactures and/or markets vehicles outside North America under the brands, including Buick, Cadillac, Chevrolet, GMC, Holden, Opel and Vauxhall. The Company offers a range of after-sale vehicle services and products through the dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories and extended service warranties. GM Financial is an automotive finance company, which provides automobile finance solutions.

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