Fenix Parts (FENX) & BorgWarner (BWA) Financial Analysis

Fenix Parts (OTCMKTS: FENX) and BorgWarner (NYSE:BWA) are both auto/tires/trucks companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.

Earnings & Valuation

This table compares Fenix Parts and BorgWarner’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fenix Parts $132.10 million 0.04 -$42.86 million ($2.03) -0.11
BorgWarner $9.07 billion 1.32 $118.50 million $1.38 41.26

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

Insider and Institutional Ownership

4.1% of Fenix Parts shares are owned by institutional investors. Comparatively, 95.2% of BorgWarner shares are owned by institutional investors. 16.6% of Fenix Parts shares are owned by insiders. Comparatively, 0.7% of BorgWarner shares are owned 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.

Profitability

This table compares Fenix Parts and BorgWarner’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fenix Parts N/A N/A N/A
BorgWarner 3.09% 21.48% 8.35%

Dividends

BorgWarner pays an annual dividend of $0.68 per share and has a dividend yield of 1.2%. Fenix Parts does not pay a dividend. BorgWarner pays out 49.3% of its earnings in the form of a dividend. Fenix Parts has raised its dividend for 3 consecutive years.

Risk & Volatility

Fenix Parts has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, BorgWarner has a beta of 1.77, indicating that its stock price is 77% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Fenix Parts and BorgWarner, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fenix Parts 0 0 0 0 N/A
BorgWarner 2 7 5 0 2.21

BorgWarner has a consensus price target of $50.64, indicating a potential downside of 11.06%. Given BorgWarner’s higher possible upside, analysts plainly believe BorgWarner is more favorable than Fenix Parts.

Summary

BorgWarner beats Fenix Parts on 12 of the 15 factors compared between the two stocks.

About Fenix Parts

Fenix Parts, Inc. is engaged in auto recycling business. The Company recovers and resells original equipment manufacturer (OEM) parts, components and systems, such as engines, transmissions, radiators, trunks, lamps and seats reclaimed from damaged, totaled or low value vehicles. The Company operates through Automobile Recycling segment. The Company purchases its vehicles primarily at auto salvage auctions. Upon receipt of vehicles, the Company inventories and then dismantles the vehicles and sells the recycled components. Its customers include collision repair shops (body shops), mechanical repair shops, auto dealerships and individual retail customers. The Company also generates a portion of its revenue from the sale as scrap of the unusable parts and materials, from the sale of used cars and motorcycles, the sale of aftermarket parts, and from the sale of extended warranty contracts.

About BorgWarner

BorgWarner Inc. is engaged in providing technology solutions for combustion, hybrid and electric vehicles. The Company’s segments include Engine and Drivetrain. The Engine segment’s products include turbochargers, timing devices and chains, emissions systems and thermal systems. The Engine segment develops and manufactures products for gasoline and diesel engines, and alternative powertrains. The Drivetrain segment’s products include transmission components and systems, all-wheel drive (AWD) torque transfer systems and rotating electrical devices. The Company’s products are manufactured and sold across the world, primarily to original equipment manufacturers (OEMs) of light vehicles (passenger cars, sport-utility vehicles (SUVs), vans and light trucks). The Company’s products are also sold to other OEMs of commercial vehicles (medium-duty trucks, heavy-duty trucks and buses) and off-highway vehicles (agricultural and construction machinery and marine applications.

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