Goodyear Tire & Rubber (NASDAQ:GT – Get Free Report) and China Automotive Systems (NASDAQ:CAAS – Get Free Report) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Goodyear Tire & Rubber and China Automotive Systems, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Goodyear Tire & Rubber | 2 | 3 | 2 | 0 | 2.00 |
| China Automotive Systems | 0 | 1 | 0 | 0 | 2.00 |
Goodyear Tire & Rubber presently has a consensus target price of $8.26, indicating a potential upside of 30.08%. Given Goodyear Tire & Rubber’s higher possible upside, research analysts plainly believe Goodyear Tire & Rubber is more favorable than China Automotive Systems.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Goodyear Tire & Rubber | $18.28 billion | 0.10 | -$1.72 billion | ($8.83) | -0.72 |
| China Automotive Systems | $765.74 million | 0.20 | $42.84 million | $1.42 | 3.51 |
China Automotive Systems has lower revenue, but higher earnings than Goodyear Tire & Rubber. Goodyear Tire & Rubber is trading at a lower price-to-earnings ratio than China Automotive Systems, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Goodyear Tire & Rubber has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, China Automotive Systems has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.
Insider and Institutional Ownership
84.2% of Goodyear Tire & Rubber shares are owned by institutional investors. Comparatively, 5.2% of China Automotive Systems shares are owned by institutional investors. 0.5% of Goodyear Tire & Rubber shares are owned by company insiders. Comparatively, 64.8% of China Automotive Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Profitability
This table compares Goodyear Tire & Rubber and China Automotive Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Goodyear Tire & Rubber | -14.37% | -2.95% | -0.50% |
| China Automotive Systems | 5.59% | 10.58% | 5.07% |
Summary
China Automotive Systems beats Goodyear Tire & Rubber on 8 of the 13 factors compared between the two stocks.
About Goodyear Tire & Rubber
Goodyear Tire & Rubber Co. engages in the development, manufacture, distribution, and sale of tires. It operates through the following geographical segments: Americas, Europe, Middle East, and Africa, and Asia Pacific. The Americas segment is involved in the development, manufacture, distribution, and sale of tires and related products and services in North, Central, and South America. The Europe, Middle East, and Africa segment focuses on the development, manufacture, distribution, and sale of tires for automobiles, trucks, buses, aircraft, motorcycles, earthmoving, mining, and industrial equipment throughout Europe, the Middle East, and Africa. The Asia Pacific segment refers to the development, manufacture, distribution, and sales of tires for automobiles, trucks, buses, aircraft, farm, earthmoving, mining, and industrial equipment throughout the Asia Pacific region. The company was founded by Frank A. Seiberling on August 29, 1898 and is headquartered in Akron, OH.
About China Automotive Systems
China Automotive Systems, Inc., through its subsidiaries, manufactures and sells automotive systems and components in the People's Republic of China, the United States, and internationally. It produces rack and pinion power steering gears for cars and light-duty vehicles; integral power steering gears for heavy-duty vehicles; power steering parts for light duty vehicles; sensor modules; automobile steering systems and columns; and automobile electronics and systems and parts. The company also offers automotive motors and electromechanical integrated systems; polymer materials; and intelligent automotive technology research and development services. In addition, it provides after sales services, and research and development support services; and inspection and testing of automotive products, as well as markets automotive parts in North America. The company primarily sells its products to the original equipment manufacturing customers. China Automotive Systems, Inc. is headquartered in Jingzhou, the People's Republic of China.
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