Atmus Filtration Technologies (NYSE:ATMU) and Garrett Motion (NYSE:GTX) Critical Comparison

Garrett Motion (NYSE:GTX) and Atmus Filtration Technologies (NYSE:ATMU) are both mid-cap auto/tires/trucks companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, institutional ownership, profitability, risk and dividends.

Risk and Volatility

Garrett Motion has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Atmus Filtration Technologies has a beta of 1.8, meaning that its share price is 80% more volatile than the S&P 500.

Profitability

This table compares Garrett Motion and Atmus Filtration Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Garrett Motion	6.54%	-31.48%	10.00%
Atmus Filtration Technologies	10.84%	134.28%	17.61%

Dividends

Garrett Motion pays an annual dividend of $0.24 per share and has a dividend yield of 2.5%. Atmus Filtration Technologies pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Garrett Motion pays out 23.5% of its earnings in the form of a dividend. Atmus Filtration Technologies pays out 9.3% 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.

Valuation & Earnings

This table compares Garrett Motion and Atmus Filtration Technologies”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Garrett Motion	$3.89 billion	0.53	$261.00 million	$1.02	9.39
Atmus Filtration Technologies	$1.63 billion	2.13	$171.30 million	$2.15	19.43

Garrett Motion has higher revenue and earnings than Atmus Filtration Technologies. Garrett Motion is trading at a lower price-to-earnings ratio than Atmus Filtration Technologies, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

86.3% of Garrett Motion shares are owned by institutional investors. Comparatively, 32.7% of Atmus Filtration Technologies shares are owned by institutional investors. 0.6% of Garrett Motion shares are owned by company insiders. Comparatively, 0.4% of Atmus Filtration Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Garrett Motion and Atmus Filtration Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Garrett Motion	0	0	1	0	3.00
Atmus Filtration Technologies	0	1	4	0	2.80

Garrett Motion presently has a consensus target price of $12.00, indicating a potential upside of 25.26%. Atmus Filtration Technologies has a consensus target price of $43.80, indicating a potential upside of 4.85%. Given Garrett Motion’s stronger consensus rating and higher possible upside, research analysts plainly believe Garrett Motion is more favorable than Atmus Filtration Technologies.

Summary

Atmus Filtration Technologies beats Garrett Motion on 9 of the 16 factors compared between the two stocks.

About Garrett Motion

Garrett Motion Inc., together with its subsidiaries, designs, manufactures, and sells turbocharging, air and fluid compression, and high-speed electric motor technologies for original equipment manufacturers and distributors worldwide. The company offers cutting-edge technology for the mobility and industrial space, including light vehicles, commercial vehicles, and industrial applications. In addition, it provides mechanical and electrical products for turbocharging and boosting internal combustion engines, as well as compressing air for fuel cell compressors, and compressing refrigerant for electric cooling compressors. The company offers its products in the aftermarket through distributors. Garrett Motion Inc. was incorporated in 2018 and is based in Rolle, Switzerland.

About Atmus Filtration Technologies

Atmus Filtration Technologies Inc. designs, manufactures, and sells filtration products under the Fleetguard brand name in North America, Europe, South America, Asia, Australia, Africa, and internationally. The company offers fuel filters, lube filters, air filters, crankcase ventilation, hydraulic filters, coolants, and fuel additives, as well as other chemicals; and fuel water separators and other filtration systems to original equipment manufacturers, dealers/distributors, and end-users. Its products are used in on-highway commercial vehicles and off-highway agriculture, construction, mining, and power generation vehicles and equipment. The company was founded in 1958 and is headquartered in Nashville, Tennessee.