Critical Analysis: LKQ (LKQ) vs. Fenix Parts (FENX)

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

Valuation and Earnings

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This table compares LKQ and Fenix Parts’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LKQ $9.74 billion 1.21 $533.74 million $1.88 20.31
Fenix Parts $132.10 million 0.06 -$42.86 million N/A N/A

LKQ has higher revenue and earnings than Fenix Parts.

Volatility and Risk

LKQ has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, Fenix Parts has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for LKQ and Fenix Parts, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LKQ 0 1 10 0 2.91
Fenix Parts 0 0 0 0 N/A

LKQ presently has a consensus target price of $44.75, suggesting a potential upside of 17.21%. Given LKQ’s higher probable upside, equities research analysts plainly believe LKQ is more favorable than Fenix Parts.

Insider & Institutional Ownership

93.9% of LKQ shares are held by institutional investors. 0.8% of LKQ shares are held by insiders. Comparatively, 16.6% of Fenix Parts shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
LKQ 5.48% 14.84% 6.70%
Fenix Parts N/A N/A N/A

Summary

LKQ beats Fenix Parts on 10 of the 11 factors compared between the two stocks.

LKQ Company Profile

LKQ Corporation, together with its subsidiaries, distributes replacement parts, components, and systems used in the repair and maintenance of vehicles in North America, Europe, and Taiwan. It operates in three segments: North America, Europe, and Specialty. The company distributes bumper covers, automotive body panels, and lights, as well as automotive glass products, such as windshields; salvage products, including mechanical and collision parts comprising engines; transmissions; door assemblies; sheet metal products, such as trunk lids, fenders, and hoods; lights and bumper assemblies; scrap metal and other materials to metals recyclers; and brake pads, discs and sensors, clutches, steering and suspension products, filters, and oil and automotive fluids, as well as electrical products, including spark plugs and batteries. It also operates self service retail operations under the LKQ Pick Your Part name. In addition, the company distributes recreational vehicle appliances and air conditioners, towing hitches, truck bed covers, vehicle protection products, cargo management products, wheels, tires, and suspension products. Further, it designs, manufactures, and markets vehicle equipment and accessories. It primarily serves collision and mechanical repair shops, and new and used car dealerships, as well as retail customers. LKQ Corporation was founded in 1998 and is headquartered in Chicago, Illinois.

Fenix Parts Company Profile

Fenix Parts, Inc. is a United States-based company that is engaged in recycling and reselling of original equipment manufacturer (OEM) automotive products in the United States and Canada. The Company is engaged in auto recycling, which is the recovery and resale of OEM parts, components and systems reclaimed from damaged, totaled or low value vehicles. The Company operates a hub and spoke distribution network allowing it to efficiently move products among its locations and expedite delivery to customers. It also generates a portion of its revenue from the sale of aftermarket parts, and from the sale as scrap of the unusable parts and materials. The Company operates around 16 locations throughout the Eastern United states and in Ontario, Canada.

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