Analyzing Autoliv (NYSE:ALV) and AB Volvo (OTCMKTS:VLVLY)

AB Volvo (OTCMKTS:VLVLY) and Autoliv (NYSE:ALV) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a summary of recent ratings for AB Volvo and Autoliv, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AB Volvo	2	5	0	4	2.55
Autoliv	0	7	6	0	2.46

Autoliv has a consensus price target of $134.79, indicating a potential upside of 22.63%. Given Autoliv’s higher possible upside, analysts clearly believe Autoliv is more favorable than AB Volvo.

Risk & Volatility

AB Volvo has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, Autoliv has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500.

Institutional & Insider Ownership

0.0% of AB Volvo shares are held by institutional investors. Comparatively, 69.6% of Autoliv shares are held by institutional investors. 0.3% of Autoliv shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

AB Volvo pays an annual dividend of $0.58 per share and has a dividend yield of 1.8%. Autoliv pays an annual dividend of $3.48 per share and has a dividend yield of 3.2%. AB Volvo pays out 30.9% of its earnings in the form of a dividend. Autoliv pays out 41.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Autoliv has raised its dividend for 1 consecutive years. Autoliv is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares AB Volvo and Autoliv’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AB Volvo	7.60%	20.16%	5.45%
Autoliv	5.79%	29.36%	8.86%

Earnings & Valuation

This table compares AB Volvo and Autoliv”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AB Volvo	$48.98 billion	1.31	$3.52 billion	$1.88	16.80
Autoliv	$10.81 billion	0.74	$735.00 million	$8.49	12.95

AB Volvo has higher revenue and earnings than Autoliv. Autoliv is trading at a lower price-to-earnings ratio than AB Volvo, indicating that it is currently the more affordable of the two stocks.

Summary

Autoliv beats AB Volvo on 10 of the 18 factors compared between the two stocks.

About AB Volvo

AB Volvo (publ), together with its subsidiaries, manufactures and sells trucks, buses, construction equipment, and marine and industrial engines in Europe, the United States, Asia, Africa, and Oceania. The company provides heavy-duty trucks for long-haulage and construction work and light-duty trucks for distribution purposes under the Volvo, Renault Trucks, Mack, Eicher, and Dongfeng Trucks brands; and city and intercity buses, coaches, and chassis under the Prevost and Volvo Bus brands. It offers road construction machine, haulers, wheel loaders, excavators, and compact equipment. In addition, the company offers engines and power solutions for leisure and commercial vessels, as well as for power generation, industrial, and off-highway applications under the Volvo Penta brand name. Further, it provides financing, insurance, rental, spare parts, repairs, preventive maintenance, service agreement, and assistance services. The company offers its products and services through a network of dealerships and workshops. It has a strategic alliance with Isuzu Motors within commercial vehicles; a partnership with Samsung SDI Co to develop batteries for its electric products; and an agreement with Aurora to develop autonomous trucks. AB Volvo (publ) was incorporated in 1915 and is headquartered in Gothenburg, Sweden.

About Autoliv

Autoliv, Inc., through its subsidiaries, develops, manufactures, and supplies passive safety systems to the automotive industry in Europe, the Americas, China, Japan, and rest of Asia. It offers passive safety systems, including modules and components for frontal-impact airbag protection systems, side-impact airbag protection systems, seatbelts, steering wheels, and inflator technologies. The company also provides mobility safety solutions, such as pedestrian protection, battery cut-off switches, connected safety services, and safety solutions for riders of powered two wheelers. It primarily serves car manufacturers. Autoliv, Inc. was founded in 1953 and is headquartered in Stockholm, Sweden.