Federal Screw Works (OTCMKTS:FSCR) vs. American Axle & Manufacturing (NYSE:AXL) Critical Contrast

Federal Screw Works (OTCMKTS:FSCR) and American Axle & Manufacturing (NYSE:AXL) are both small-cap auto/tires/trucks companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Profitability

This table compares Federal Screw Works and American Axle & Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Federal Screw Works	1.66%	N/A	N/A
American Axle & Manufacturing	0.73%	8.90%	1.05%

Analyst Ratings

This is a summary of recent ratings and target prices for Federal Screw Works and American Axle & Manufacturing, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Federal Screw Works	0	0	0	0	0.00
American Axle & Manufacturing	0	5	3	0	2.38

American Axle & Manufacturing has a consensus target price of $7.00, indicating a potential upside of 31.33%. Given American Axle & Manufacturing’s stronger consensus rating and higher possible upside, analysts clearly believe American Axle & Manufacturing is more favorable than Federal Screw Works.

Valuation & Earnings

This table compares Federal Screw Works and American Axle & Manufacturing”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Federal Screw Works	$97.55 million	0.13	$1.62 million	$1.18	7.67
American Axle & Manufacturing	$6.12 billion	0.10	$33.80 million	$0.34	15.68

American Axle & Manufacturing has higher revenue and earnings than Federal Screw Works. Federal Screw Works is trading at a lower price-to-earnings ratio than American Axle & Manufacturing, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Federal Screw Works has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, American Axle & Manufacturing has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500.

Institutional & Insider Ownership

91.4% of American Axle & Manufacturing shares are held by institutional investors. 46.2% of Federal Screw Works shares are held by insiders. Comparatively, 2.1% of American Axle & Manufacturing shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

American Axle & Manufacturing beats Federal Screw Works on 10 of the 14 factors compared between the two stocks.

About Federal Screw Works

Federal Screw Works manufactures and sells industrial component parts primarily to the automobile industry in the United States. It operates through Big Rapids, Romulus, Traverse City, and Novex Tool divisions. The company offers cold formed and machined pins, including piston pins, planetary and differential gear shafts, and oil pump and steering shafts for the automotive, refrigeration, and small engine industries; and cold formed machined products, such as suspension ball studs, fluid line adapters, and precision formed and machined valve lifter bodies to the automotive industry. It also provides close tolerance machined products that are used in transmission valves, ball joints, steering gear bulkhead assemblies, torque converter hubs, and piston pins; and engineered nut products comprising prevailing torque nuts, free spinning nuts, slotted nuts, nut retainer assemblies, and nut washer assemblies to the automotive industry. In addition, the company offers cold form tooling products, which include assemblies, sleeves, dies, and punches; and complex cold formed parts, such as tie rod housings, valve lifter bodies, and suspension components. Federal Screw Works was founded in 1917 and is based in Romulus, Michigan.

About American Axle & Manufacturing

American Axle & Manufacturing Holdings, Inc. engages in the manufacture, engineering, design, and validation of driveline systems and related components. It operates through the Driveline and Metal Forming segments. The Driveline segment consists of axles, drive shafts, power transfer units, rear drive modules, and electric and hybrid driveline products and systems for light trucks, service utility vehicles, crossover vehicles, passenger cars, and commercial vehicles. The Metal Forming segment manufactures axle shafts, ring and pinion gears, differential gears, transmission gears, and shafts and suspension components for original equipment manufacturers (OEMs), and Tier 1 automotive suppliers. The company was founded by Richard E. Dauch on March 1, 1994, and is headquartered in Detroit, MI.