Analyzing Forvia (OTCMKTS:FURCF) & BorgWarner (NYSE:BWA)

BorgWarner (NYSE:BWA) and Forvia (OTCMKTS:FURCF) are both consumer cyclical companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.

Dividends

BorgWarner pays an annual dividend of $0.44 per share and has a dividend yield of 1.3%. Forvia pays an annual dividend of $0.30 per share and has a dividend yield of 2.9%. BorgWarner pays out 16.7% of its earnings in the form of a dividend. Forvia pays out 25.1% 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.

Profitability

This table compares BorgWarner and Forvia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BorgWarner	4.97%	15.50%	6.66%
Forvia	N/A	N/A	N/A

Analyst Ratings

This is a summary of current recommendations for BorgWarner and Forvia, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BorgWarner	0	5	10	0	2.67
Forvia	0	0	0	0	N/A

BorgWarner presently has a consensus price target of $41.07, suggesting a potential upside of 25.82%. Given BorgWarner’s higher possible upside, analysts clearly believe BorgWarner is more favorable than Forvia.

Institutional and Insider Ownership

95.7% of BorgWarner shares are owned by institutional investors. Comparatively, 28.1% of Forvia shares are owned by institutional investors. 0.5% of BorgWarner shares are owned by 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.

Earnings and Valuation

This table compares BorgWarner and Forvia’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BorgWarner	$14.34 billion	0.52	$625.00 million	$2.64	12.36
Forvia	N/A	N/A	N/A	$1.20	8.78

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

Summary

BorgWarner beats Forvia on 11 of the 12 factors compared between the two stocks.

About BorgWarner

BorgWarner Inc., together with its subsidiaries, provides solutions for combustion, hybrid, and electric vehicles worldwide. It offers turbochargers, eBoosters, eTurbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, cabin heaters, battery modules and systems, battery heaters, and battery charging. The company provides power electronics, control modules, software, friction, and mechanical products for automatic transmissions and torque-management products. It sells its products to original equipment manufacturers of light vehicles, which comprise passenger cars, sport-utility vehicles, vans, and light trucks; commercial vehicles, including medium-duty and heavy-duty trucks, and buses; and off-highway vehicles, such as agricultural and construction machinery, and marine applications, as well as to tier one vehicle systems suppliers and the aftermarket for light, commercial, and off-highway vehicles. The company was formerly known as Borg-Warner Automotive, Inc. BorgWarner Inc. was incorporated in 1987 and is headquartered in Auburn Hills, Michigan.

About Forvia

Forvia SE, together with its subsidiaries, manufactures and sells automotive technology solutions in France, Germany, other European countries, the Americas, Asia, and internationally. It operates through Seating, Clean Mobility, Electronics, Lighting, and Lifecycle Solutions segments. The Seating segment designs and manufactures vehicle seats, seating frames, and comfort solutions, as well as adjustment mechanisms. The Clean Mobility segment designs and manufactures exhaust systems, solutions for fuel cell electric vehicles, and aftertreatment solutions for commercial vehicles. The Electronics segment designs and manufactures display technologies, driver assistance systems, and cockpit electronics, including HELLA electronics and Clarion electronics The Lighting segment designs and manufactures lighting technologies. The Lifecycle Solutions segment provides solutions extending the vehicle lifecycle, as well as workshop equipment and special original equipment. The company also offers actuators, and electrification and energy management solutions as well as zero-emissions solutions. The company was formerly known as Faurecia S.E. and changed its name to Forvia SE in June 2023. Forvia SE was incorporated in 1929 and is headquartered in Nanterre, France.\