Analyzing Group 1 Automotive (NYSE:GPI) and Kaixin Auto (NYSE:KXIN)

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Group 1 Automotive (NYSE:GPI) and Kaixin Auto (NASDAQ:KXIN) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Dividends

Group 1 Automotive pays an annual dividend of $1.04 per share and has a dividend yield of 1.3%. Kaixin Auto does not pay a dividend. Group 1 Automotive pays out 11.7% of its earnings in the form of a dividend. Group 1 Automotive has increased its dividend for 9 consecutive years.

Risk & Volatility

Group 1 Automotive has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500. Comparatively, Kaixin Auto has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Group 1 Automotive and Kaixin Auto, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Group 1 Automotive 0 1 5 0 2.83
Kaixin Auto 0 0 0 0 N/A

Group 1 Automotive currently has a consensus price target of $87.20, suggesting a potential upside of 7.10%. Given Group 1 Automotive’s higher probable upside, analysts plainly believe Group 1 Automotive is more favorable than Kaixin Auto.

Earnings and Valuation

This table compares Group 1 Automotive and Kaixin Auto’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Group 1 Automotive $11.60 billion 0.13 $157.77 million $8.91 9.14
Kaixin Auto N/A N/A $2.26 million N/A N/A

Group 1 Automotive has higher revenue and earnings than Kaixin Auto.

Insider and Institutional Ownership

100.0% of Group 1 Automotive shares are held by institutional investors. Comparatively, 31.1% of Kaixin Auto shares are held by institutional investors. 6.0% of Group 1 Automotive shares are held by company insiders. Comparatively, 20.8% of Kaixin Auto shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Group 1 Automotive and Kaixin Auto’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Group 1 Automotive 1.31% 15.90% 3.54%
Kaixin Auto N/A 49.46% 1.17%

Summary

Group 1 Automotive beats Kaixin Auto on 10 of the 13 factors compared between the two stocks.

About Group 1 Automotive

Group 1 Automotive, Inc., through its subsidiaries, operates in the automotive retail industry. The company sells new and used cars, light trucks, and vehicle parts, as well as service insurance contracts; arranges related vehicle financing; and offers automotive maintenance and repair services. It has operations primarily in the metropolitan areas in Alabama, California, Florida, Georgia, Kansas, Louisiana, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New Mexico, Oklahoma, South Carolina, and Texas in the United States; 32 towns in the United Kingdom; and metropolitan markets in the states of Sao Paulo, Parana, Mato Grosso do Sul, and Santa Catarina, Brazil. As of February 14, 2019, the company owned and operated 182 automotive dealerships, 237 franchises, and 47 collision centers that offer 30 brands of automobiles. Group 1 Automotive, Inc. was founded in 1995 and is headquartered in Houston, Texas.

About Kaixin Auto

Kaixin Auto Holdings operates as a used car dealership in the People's Republic of China. As of December 31, 2018, the company had 14 dealerships. It also provides financing channels to its customers through its partnership with financial institutions; and value-added services to its customers, including insurance, extended warranties, and after-sales services The company was founded in 2015 and is based in Beijing, the People's Republic of China.

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