Schaeffler (OTCMKTS:SCFLF) and Visteon (NASDAQ:VC) Critical Review

Schaeffler (OTCMKTS:SCFLF) and Visteon (NASDAQ:VC) are both auto/tires/trucks companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.

Analyst Recommendations

This is a summary of recent ratings for Schaeffler and Visteon, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Schaeffler	0	0	1	0	3.00
Visteon	0	4	10	1	2.80

Visteon has a consensus target price of $127.08, suggesting a potential upside of 5.07%. Given Visteon’s higher probable upside, analysts clearly believe Visteon is more favorable than Schaeffler.

Profitability

This table compares Schaeffler and Visteon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Schaeffler	-3.86%	-2.38%	-0.45%
Visteon	7.61%	23.22%	10.65%

Earnings & Valuation

This table compares Schaeffler and Visteon”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Schaeffler	$19.68 billion	N/A	-$683.89 million	$0.24	20.00
Visteon	$3.87 billion	0.85	$274.00 million	$10.49	11.53

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

Institutional and Insider Ownership

99.7% of Visteon shares are owned by institutional investors. 2.0% of Visteon shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Visteon beats Schaeffler on 11 of the 13 factors compared between the two stocks.

About Schaeffler

Schaeffler AG, together with its subsidiaries, develops, manufactures, and sells components and system for industrial applications in Europe, the Americas, China, and the Asia Pacific. The Automotive Technologies division offers mechanical, mechatronic, and electronic components and systems for powertrain electrification used in passenger cars and commercial vehicles, such as electric motors, axle transmissions, axle drives, power electronics, hybrid modules, electromechanical and hydraulic actuators, and thermal management module; torque converters, hybrid dampers, clutches, variable valve train systems, valve-lash adjustment elements, balancer shafts, camshaft phasing systems, timing drives, and front end auxillary drives. This division provides rolling bearing application and products, such as wheel, ball, and needle roller bearings; and mechanical components and mechatronic systems for steering and other chassis applications, including Space Drive, a steer-by-wire system. The Automotive Aftermarket division offers components and repair solutions for light commercial vehicles, trucks and buses, and offroad sectors under the LuK, INA, and FAG brand names, as well as service for repair shops under the REPXPERT brand. The Industrial division develops and manufactures rotary and linear bearing solutions, drive technology components and systems, and service solutions, such as sensor-based condition monitoring systems. This division serves customers in the wind, raw materials, aerospace, rail, offroad, two wheelers, power transmission, and industrial automation sectors. The company was formerly known as INA Beteiligungsgesellschaft mit beschränkter Haftung and changed its name to Schaeffler AG in October 2014. The company was founded in 1946 and is headquartered in Herzogenaurach, Germany. Schaeffler AG is a subsidiary of IHO Verwaltungs GmbH.

About Visteon

Visteon Corporation, an automotive technology company, designs, manufactures, and sells automotive electronics and connected car solutions for vehicle manufacturers worldwide. The company provides instrument clusters, including analog gauge clusters for 2-D and 3-D display-based devices; information displays that integrate a range of user interface technologies and graphics management capabilities, such as active privacy, TrueColor enhancement, local dimming, cameras, optics, haptic feedback, and light effects; and infotainment and connected car solutions, including scalable Android infotainment for seamless connectivity, as well as onboard artificial intelligence-based voice assistants with natural language understanding. It offers wired and wireless battery management systems; power electronics units; and telematics control units to enable secure connected car services, software updates, and data. In addition, the company provides SmartCore, an automotive-grade, integrated domain controller; SmartCore Runtime, a middleware enabling communication between domains and apps to be shown on any display; SmartCore Studio, a PC-based configuration tool to generate hypervisor configurations; and body domain modules, which integrate various functions, such as central gateway, body controls, comfort, and vehicle access solutions, into one device. Visteon Corporation was incorporated in 2000 and is headquartered in Van Buren, Michigan.