Critical Comparison: Iochpe-Maxion (OTCMKTS:IOCJY) and BRP (NASDAQ:DOOO)

Iochpe-Maxion (OTCMKTS:IOCJY) and BRP (NASDAQ:DOOO) are both auto/tires/trucks companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, valuation, risk, earnings and institutional ownership.

Risk & Volatility

Iochpe-Maxion has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, BRP has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.

Valuation and Earnings

This table compares Iochpe-Maxion and BRP”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iochpe-Maxion	$2.75 billion	0.09	$17.62 million	$0.03	17.64
BRP	$8.03 billion	0.51	-$154.60 million	$0.37	152.68

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

Profitability

This table compares Iochpe-Maxion and BRP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Iochpe-Maxion	0.63%	2.04%	0.66%
BRP	0.45%	67.30%	4.72%

Dividends

Iochpe-Maxion pays an annual dividend of $0.01 per share and has a dividend yield of 1.9%. BRP pays an annual dividend of $0.61 per share and has a dividend yield of 1.1%. Iochpe-Maxion pays out 33.3% of its earnings in the form of a dividend. BRP pays out 164.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BRP has increased its dividend for 2 consecutive years. Iochpe-Maxion is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Iochpe-Maxion and BRP, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iochpe-Maxion	0	1	0	0	2.00
BRP	0	4	8	2	2.86

BRP has a consensus target price of $94.75, suggesting a potential upside of 67.73%. Given BRP’s stronger consensus rating and higher possible upside, analysts plainly believe BRP is more favorable than Iochpe-Maxion.

Summary

BRP beats Iochpe-Maxion on 12 of the 16 factors compared between the two stocks.

About Iochpe-Maxion

Iochpe-Maxion S.A. produces and sells automotive wheels and structural components for commercial and light vehicles in North America, South America, Europe, Asia, and internationally. It operates in two divisions, Maxion Wheels and Maxion Structural Components. The company offers heavy steel wheels; light steel wheels for automobiles, pick-ups, and SUVs, as well as light and medium commercial vehicles; wheels for agricultural machinery; and light aluminum wheels for automobiles. It also provides heavy structural components, including frames, side members, and cross members. In addition, the company offers light and automotive structural components, such as stampings for passenger vehicles, handbrake levers, pedal and welded assemblies, structural parts, and other automotive components. Further, it produces railway wheels, freight cars, and castings, as well as industrial castings. The company was founded in 1918 and is headquartered in Cruzeiro, Brazil.

About BRP

BRP Inc., together with its subsidiaries, designs, develops, manufactures, distributes, and markets powersports vehicles and marine products in the United States, Canada, Europe, the Asia Pacific, Mexico, Austria, and internationally. The Powersports segment offers year-round products, such as Can-Am all-terrain vehicles, side-by-side vehicles, and three-wheeled vehicles; and seasonal products, including Ski-Doo and Lynx snowmobiles, Sea-Doo personal watercrafts and pontoons, Rotax engines for karts and recreational aircraft, and Pinion gearboxes with smart shift systems. The Marine segment provides Alumacraft, Manitou, Quintrex, Stacer, and Yellowfin boats; Rotax engines for jet boats; and Rotax S outboard engine. The company was formerly known as J.A. Bombardier (J.A.B.) Inc. and changed its name to BRP Inc. in April 2013. BRP Inc. was founded in 1937 and is headquartered in Valcourt, Canada.