Head-To-Head Review: Garrett Motion (NYSE:GTX) & Modine Manufacturing (NYSE:MOD)

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Modine Manufacturing (NYSE:MOD) and Garrett Motion (NYSE:GTX) are both small-cap auto/tires/trucks companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Institutional & Insider Ownership

87.8% of Modine Manufacturing shares are owned by institutional investors. Comparatively, 82.0% of Garrett Motion shares are owned by institutional investors. 5.0% of Modine Manufacturing shares are owned by company insiders. Comparatively, 0.4% of Garrett Motion shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Modine Manufacturing and Garrett Motion’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Modine Manufacturing $2.21 billion 0.23 $84.80 million $1.57 6.36
Garrett Motion $3.38 billion 0.24 $1.18 billion $4.05 2.70

Garrett Motion has higher revenue and earnings than Modine Manufacturing. Garrett Motion is trading at a lower price-to-earnings ratio than Modine Manufacturing, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Modine Manufacturing and Garrett Motion, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Modine Manufacturing 0 0 0 0 N/A
Garrett Motion 2 3 1 0 1.83

Garrett Motion has a consensus price target of $15.50, suggesting a potential upside of 41.55%. Given Garrett Motion’s higher possible upside, analysts plainly believe Garrett Motion is more favorable than Modine Manufacturing.

Profitability

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

Net Margins Return on Equity Return on Assets
Modine Manufacturing 3.25% 14.19% 4.92%
Garrett Motion 34.50% -44.81% 50.86%

Summary

Garrett Motion beats Modine Manufacturing on 8 of the 12 factors compared between the two stocks.

About Modine Manufacturing

Modine Manufacturing Company provides engineered heat transfer systems and heat transfer components for use in on- and off-highway original equipment manufacturer (OEM) vehicular applications primarily in the United States. The company operates through Americas, Europe, Asia, Commercial and Industrial Solutions, and Building HVAC segments. It offers powertrain cooling products, such as engine cooling assemblies, radiators, condensers, and charge air coolers; auxiliary cooling products, including power steering and transmission oil coolers; component assemblies; radiators for special applications; on-engine cooling products comprising exhaust gas recirculation, engine oil, fuel, and charge and intake air coolers; and chillers and cooling plates for battery thermal management. The company also provides heat-exchanger and microchannel Coils; unit, fluid, transformer oil, and brine coolers, as well as remote condensers; and coatings to protect against corrosion. In addition, it offers gas-fired, hydronic, electric, and oil-fired unit heaters; indoor and outdoor duct furnaces; infrared units; hydronic products, such as commercial fin-tube radiation, cabinet unit heaters, and convectors; roof-mounted direct- and indirect-fired makeup air units; commercial packaged rooftop ventilation units; unit ventilators; single packaged vertical units; precision air conditioning units for data center applications; air-handling units; chillers; ceiling cassettes; hybrid fan coils; and condensing units. It primarily serves automobile, truck, bus, and specialty vehicle OEMs; agricultural, industrial, and construction equipment OEMs; commercial and industrial equipment OEMs; heating, ventilation, and cooling OEMs; construction architects and contractors; and wholesalers of heating equipment. The company also exports its products. Modine Manufacturing Company was founded in 1916 and is headquartered in Racine, Wisconsin.

About Garrett Motion

Garrett Motion Inc. designs, manufactures, and sells turbocharger and electric boosting technologies for light and commercial vehicle original equipment manufacturers and the aftermarket worldwide. The company offers light vehicle gasoline and diesel, and commercial vehicle turbochargers. Its integrated vehicle health management tools detect intermittent faults and anomalies to provide understanding of the real-time health of a vehicle system. The company offers its products through distribution networks. Garrett Motion Inc. was incorporated in 2018 and is headquartered in Rolle, Switzerland.

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