Head-To-Head Comparison: Linamar (OTCMKTS:LIMAF) vs. China Automotive Systems (NASDAQ:CAAS)

China Automotive Systems (NASDAQ:CAAS) and Linamar (OTCMKTS:LIMAF) are both consumer cyclical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, dividends, analyst recommendations and risk.

Institutional & Insider Ownership

6.0% of China Automotive Systems shares are held by institutional investors. Comparatively, 25.1% of Linamar shares are held by institutional investors. 65.2% of China Automotive Systems shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares China Automotive Systems and Linamar’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Automotive Systems	$545.98 million	0.21	$21.18 million	$1.03	3.66
Linamar	N/A	N/A	N/A	$4.85	8.90

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

Analyst Ratings

This is a breakdown of current recommendations for China Automotive Systems and Linamar, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Automotive Systems	0	0	1	0	3.00
Linamar	0	0	3	0	3.00

Linamar has a consensus target price of $93.75, suggesting a potential upside of 117.22%. Given Linamar’s higher probable upside, analysts clearly believe Linamar is more favorable than China Automotive Systems.

Profitability

This table compares China Automotive Systems and Linamar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Automotive Systems	5.69%	9.22%	4.39%
Linamar	N/A	N/A	N/A

About China Automotive Systems

China Automotive Systems, Inc., through its subsidiaries, manufactures and sells automotive systems and components in the People's Republic of China and internationally. It produces rack and pinion power steering gears for cars and light-duty vehicles; integral power steering gears for heavy-duty vehicles; power steering parts for light duty vehicles; sensor modules; automobile steering systems and columns; and automobile electronic and hydraulic power steering systems and parts. The company also offers automotive motors and electromechanical integrated systems; polymer materials; and intelligent automotive technology research and development services. In addition, it provides after sales services, and research and development support services, as well as markets automotive parts in North America and Brazil. The company primarily sells its products to the original equipment manufacturing customers. China Automotive Systems, Inc. was incorporated in 1999 and is headquartered in Jingzhou, the People's Republic of China.

About Linamar

Linamar Corporation, together with its subsidiaries, produces engineered products in Canada, Europe, the Asia Pacific, and rest of North America. It operates through two segments, Mobility and Industrial. The Mobility segment focuses on light metal casting, forging, machining, and assembly for electrified powered vehicle markets. It also focuses on components and systems for new energy powertrains, body and chassis, driveline, engine, and transmission systems of vehicles. The Industrial segment manufactures scissor, boom, and telehandler lifts for the aerial work platform industry. This segment also manufactures draper headers and self-propelled windrowers for the agricultural harvesting industry, as well as supplies farm tillage and crop fertilizer applicator equipment. The company was founded in 1964 and is headquartered in Guelph, Canada.