Financial Review: Strattec Security (NASDAQ:STRT) versus Solid Power (NASDAQ:SLDP)

Strattec Security (NASDAQ:STRT) and Solid Power (NASDAQ:SLDP) are both small-cap auto/tires/trucks companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Volatility & Risk

Strattec Security has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Solid Power has a beta of 1.91, suggesting that its stock price is 91% more volatile than the S&P 500.

Profitability

This table compares Strattec Security and Solid Power’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Strattec Security	4.31%	11.00%	7.22%
Solid Power	-485.47%	-21.57%	-20.02%

Institutional & Insider Ownership

68.9% of Strattec Security shares are held by institutional investors. Comparatively, 33.7% of Solid Power shares are held by institutional investors. 3.9% of Strattec Security shares are held by company insiders. Comparatively, 5.7% of Solid Power shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Strattec Security and Solid Power, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Strattec Security	1	0	1	1	2.67
Solid Power	1	1	2	0	2.25

Solid Power has a consensus target price of $7.00, suggesting a potential upside of 143.06%. Given Solid Power’s higher probable upside, analysts clearly believe Solid Power is more favorable than Strattec Security.

Earnings and Valuation

This table compares Strattec Security and Solid Power”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Strattec Security	$565.07 million	0.49	$18.68 million	$6.06	11.04
Solid Power	$21.75 million	29.79	-$93.41 million	($0.48)	-6.00

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

Summary

Strattec Security beats Solid Power on 10 of the 15 factors compared between the two stocks.

About Strattec Security

Strattec Security Corporation designs, develops, manufactures, and markets automotive access control products under the VAST Automotive Group brand primarily in North America. The company provides mechanical and electronically enhanced locks and keys, passive entry passive start systems, steering column and instrument panel ignition lock housings, latches, power sliding side door systems, power tailgate and lift gate systems, power deck lid systems, door handles, and related products. It also offers full service and aftermarket support services for its products. The company markets its products to automotive and light truck original equipment manufacturers, as well as other transportation-related manufacturers; and through wholesale distributors, other marketers, and users of component parts, as well as certain products to non-automotive commercial customers. It also exports its products to Europe, South America, Korea, China, and India. Strattec Security Corporation was founded in 1908 and is headquartered in Milwaukee, Wisconsin.

About Solid Power

Solid Power, Inc. develops solid state battery technologies for the electric vehicles (EV) and other markets in the United States. The company sells its sulfide-based solid electrolyte; and licenses its solid-state cell designs and manufacturing processes. It also produces and sells 0.2, 2, 20 ampere-hour (Ah), and EV cells. Solid Power, Inc. was founded in 2011 and is headquartered in Louisville, Colorado.