Comparing Denso (OTCMKTS:DNZOY) & Gentex (NASDAQ:GNTX)

Gentex (NASDAQ:GNTX) and Denso (OTCMKTS:DNZOY) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, risk, institutional ownership, dividends, profitability and earnings.

Insider and Institutional Ownership

86.8% of Gentex shares are owned by institutional investors. 0.5% of Gentex shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Gentex and Denso, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gentex	1	5	1	0	2.00
Denso	0	3	0	0	2.00

Gentex presently has a consensus target price of $25.20, indicating a potential upside of 21.97%. Given Gentex’s higher probable upside, equities analysts plainly believe Gentex is more favorable than Denso.

Earnings and Valuation

This table compares Gentex and Denso”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gentex	$2.63 billion	1.68	$384.84 million	$1.86	11.11
Denso	$50.09 billion	0.68	$2.93 billion	$1.03	11.39

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

Profitability

This table compares Gentex and Denso’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gentex	15.50%	16.78%	14.18%
Denso	5.59%	7.85%	4.96%

Dividends

Gentex pays an annual dividend of $0.48 per share and has a dividend yield of 2.3%. Denso pays an annual dividend of $0.26 per share and has a dividend yield of 2.2%. Gentex pays out 25.8% of its earnings in the form of a dividend. Denso pays out 25.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Volatility and Risk

Gentex has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Denso has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.

Summary

Gentex beats Denso on 10 of the 15 factors compared between the two stocks.

About Gentex

Gentex Corporation designs, develops, manufactures, markets, and supplies digital vision, connected car, dimmable glass, and fire protection products in the United States, Germany, Japan, Mexico, Republic of Korea, and internationally. It operates through Automotive Products and Other segments. The company offers automotive products, including interior and exterior electrochromic automatic-dimming rearview mirrors, automotive electronics, and non-automatic-dimming rearview mirrors for automotive passenger cars, light trucks, pick-up trucks, sport utility vehicles, and vans for original equipment manufacturers, automotive suppliers, and various aftermarket and accessory customers. It also provides variable dimmable windows to aircraft manufacturers and airline operators. In addition, the company offers photoelectric smoke detectors and alarms, electrochemical carbon monoxide alarms and detectors, audible and visual signaling alarms, and bells and speakers used in fire detection systems in office buildings, hotels, and other commercial and residential buildings, as well as researches and develops nanofiber chemical sensing products. It sells its fire protection products directly, as well as through sales managers and manufacturer representative organizations to fire protection and security product distributors, electrical wholesale houses, and original equipment manufacturers of fire protection systems. Gentex Corporation was incorporated in 1974 and is headquartered in Zeeland, Michigan.

About Denso

DENSO Corporation engages in the manufacture and sale of automotive parts in Japan, rest of Asia, North America, Europe, and internationally. The company offers air-conditioning systems, including thermal management heat pump system, heat pump air-conditioning systems, refrigerant products, personal heating and cooling devices, air quality system, heat exchangers, bus air-conditioning systems, automotive freezers, and cooling products, as well as heating, ventilation, and air-conditioning units. It also provides gasoline, diesel, hybrid, electric vehicle, and fuel cell vehicle power-train systems; and safety and cockpit systems, such as driving environment recognition, vehicle dynamic control, collision safety, visibility support, cockpit information, and information security systems, as well as other products. In addition, the company offers automotive service parts and accessories, comprising spark plugs, oil and cabin air filters, wiper blades, air filter elements, starters, alternators, compressors, oxygen sensors, fuel pumps, air conditioner service parts, radiators, condensers, ion generators, air conditioners for busses and construction vehicles, and truck refrigeration products, as well as refrigerant recovery, recycling, and charging machines; and repair and support products and services. Further, it provides industrial solutions for factories in automotive parts production; agricultural solutions, including Profarm Controller, a climate control system for greenhouse and horticulture solutions; and household air conditioning equipment and industrial systems. The company was incorporated in 1949 and is headquartered in Kariya, Japan.