Comparing Lear (LEA) and Veoneer (VNE)

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Lear (NYSE: VNE) and Veoneer (NYSE:VNE) are both auto/tires/trucks companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Dividends

Lear pays an annual dividend of $2.80 per share and has a dividend yield of 1.7%. Veoneer does not pay a dividend. Lear pays out 16.5% of its earnings in the form of a dividend. Lear has raised its dividend for 7 consecutive years.

Profitability

This table compares Lear and Veoneer’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lear 6.31% 28.84% 10.26%
Veoneer N/A N/A N/A

Insider and Institutional Ownership

91.3% of Lear shares are owned by institutional investors. Comparatively, 7.9% of Veoneer shares are owned by institutional investors. 0.4% of Lear shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Lear and Veoneer, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lear 0 7 10 0 2.59
Veoneer 0 9 4 0 2.31

Lear presently has a consensus target price of $205.59, indicating a potential upside of 25.25%. Veoneer has a consensus target price of $47.07, indicating a potential downside of 4.19%. Given Lear’s stronger consensus rating and higher probable upside, equities analysts clearly believe Lear is more favorable than Veoneer.

Valuation & Earnings

This table compares Lear and Veoneer’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lear $20.47 billion 0.53 $1.31 billion $17.00 9.66
Veoneer N/A N/A N/A N/A N/A

Lear has higher revenue and earnings than Veoneer.

Summary

Lear beats Veoneer on 11 of the 12 factors compared between the two stocks.

Lear Company Profile

Lear Corporation designs, develops, engineers, manufactures, assembles, and supplies automotive seating, and electrical distribution systems and related components primarily to automotive original equipment manufacturers worldwide. The company operates through Seating and E-Systems segments. The Seating segment includes seat systems and related components, such as leather and fabric products, seat trim covers, recliner mechanisms, seat tracks, seat structures and mechanisms, seat foams, and headrests primarily for automobiles and light trucks, compact cars, and sport utility vehicles, as well as thermoelectric seat heating and cooling systems. The E-Systems segment offers electrical distribution systems that route electrical signals and manage electrical power within the vehicle for traditional vehicle architectures, as well as high power and hybrid electric systems. This segment's products include wire harnesses, terminals and connectors, and junction boxes; and electronic control modules, such as body control modules, smart junction boxes, gateway modules, wireless control modules, lighting control modules and audio domain controllers, and amplifiers, as well as associated software. It also offers wireless systems comprising passive entry, remote keyless entry, and dual range/dual function remote keyless entry systems. The company was founded in 1917 and is headquartered in Southfield, Michigan.

Veoneer Company Profile

Veoneer, Inc. designs, develops, manufactures, and sells automotive safety electronics products. The company offers automotive radars, cameras with driver assist systems, night vision systems, positioning systems, restraint control, sensing, and brake systems. The company is based in Stockholm, Sweden. Veoneer, Inc.(NYSE:VNE.WI) operates independently of Autoliv, Inc. as of June 29, 2018.

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