Reviewing Volkswagen (VLKAY) and SPX (SPXC)

Volkswagen (OTCMKTS: VLKAY) and SPX (NYSE:SPXC) are both auto/tires/trucks companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.

Risk & Volatility

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Volkswagen has a beta of 1.79, indicating that its stock price is 79% more volatile than the S&P 500. Comparatively, SPX has a beta of 1.57, indicating that its stock price is 57% more volatile than the S&P 500.

Insider and Institutional Ownership

0.1% of Volkswagen shares are owned by institutional investors. Comparatively, 86.7% of SPX shares are owned by institutional investors. 0.6% of SPX 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.

Dividends

Volkswagen pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. SPX does not pay a dividend. Volkswagen pays out 14.1% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Volkswagen and SPX, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Volkswagen 0 2 5 0 2.71
SPX 0 1 0 0 2.00

SPX has a consensus target price of $32.00, indicating a potential downside of 1.48%. Given SPX’s higher possible upside, analysts plainly believe SPX is more favorable than Volkswagen.

Profitability

This table compares Volkswagen and SPX’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Volkswagen 3.02% 6.83% 1.64%
SPX 6.26% 31.70% 4.02%

Valuation & Earnings

This table compares Volkswagen and SPX’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Volkswagen $240.46 billion 0.42 $5.94 billion $2.27 17.64
SPX $1.43 billion 0.97 $89.30 million $1.78 18.25

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

Summary

SPX beats Volkswagen on 9 of the 16 factors compared between the two stocks.

Volkswagen Company Profile

Volkswagen AG is engaged in developing vehicles and components for its brands. It also produces and sells vehicles, in particular passenger cars and light commercial vehicles for the Volkswagen Passenger Cars and Volkswagen Commercial Vehicles brands. The Passenger Cars segment cover the development of vehicles and engines, the production and sale of passenger cars, and the corresponding genuine parts business. The Commercial Vehicles segment comprises the development, production and sale of light commercial vehicles, trucks and buses, the genuine parts business and related services. The Power Engineering segment consist of the development and production of large-bore diesel engines, turbo compressors, industrial turbines and chemical reactor systems, the production of gear units, propulsion components and testing systems. The Financial Services segment comprises dealer and customer financing, leasing, banking and insurance activities, fleet management and mobility services.

SPX Company Profile

SPX Corporation is a global supplier of infrastructure equipment. The Company operates through three segments: HVAC; Detection and Measurement, and Engineered Solutions. The HVAC solutions offered by its businesses include package cooling towers, residential and commercial boilers, heating and ventilation products. Its detection and measurement product lines encompass underground pipe and cable locators, and inspection equipment. Within its power platform, it is a manufacturer of medium and large power transformers, as well as equipment for various types of power plant, including cooling equipment, heat exchangers and pollution control systems. As of December 31, 2016, the Company had operations in approximately 15 countries.

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