Comparing American Axle & Manufacturing (NYSE:DCH) and Garrett Motion (OTCMKTS:GTXMQ)

Garrett Motion (OTCMKTS:GTXMQ) and American Axle & Manufacturing (NYSE:DCH) are both small-cap auto/tires/trucks companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, valuation, earnings, risk, analyst recommendations and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Garrett Motion	6.65%	-6.89%	6.44%
American Axle & Manufacturing	-0.34%	10.00%	1.17%

Institutional & Insider Ownership

12.7% of Garrett Motion shares are owned by institutional investors. Comparatively, 91.4% of American Axle & Manufacturing shares are owned by institutional investors. 0.9% of Garrett Motion shares are owned by insiders. Comparatively, 2.1% of American Axle & Manufacturing shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

Garrett Motion has a beta of 2.55, indicating that its share price is 155% more volatile than the S&P 500. Comparatively, American Axle & Manufacturing has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500.

Earnings and Valuation

This table compares Garrett Motion and American Axle & Manufacturing”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Garrett Motion	$3.25 billion	0.00	$313.00 million	$3.86	N/A
American Axle & Manufacturing	$5.84 billion	0.24	-$19.70 million	($0.18)	-32.64

Garrett Motion has higher earnings, but lower revenue 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.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Garrett Motion	0	0	0	0	0.00
American Axle & Manufacturing	1	2	0	0	1.67

American Axle & Manufacturing has a consensus price target of $7.00, suggesting a potential upside of 19.15%. Given American Axle & Manufacturing’s stronger consensus rating and higher probable upside, analysts plainly believe American Axle & Manufacturing is more favorable than Garrett Motion.

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.

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.