Critical Comparison: Atmus Filtration Technologies (NYSE:ATMU) versus LCI Industries (NYSE:LCII)

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

Dividends

LCI Industries pays an annual dividend of $4.20 per share and has a dividend yield of 3.5%. Atmus Filtration Technologies pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. LCI Industries pays out 114.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Atmus Filtration Technologies pays out 10.2% of its earnings in the form of a dividend.

Institutional & Insider Ownership

99.7% of LCI Industries shares are held by institutional investors. Comparatively, 32.7% of Atmus Filtration Technologies shares are held by institutional investors. 3.5% of LCI Industries shares are held by company insiders. Comparatively, 0.4% of Atmus Filtration Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for LCI Industries and Atmus Filtration Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LCI Industries	2	2	2	0	2.00
Atmus Filtration Technologies	0	0	5	0	3.00

LCI Industries currently has a consensus price target of $109.00, suggesting a potential downside of 8.11%. Atmus Filtration Technologies has a consensus price target of $35.80, suggesting a potential upside of 5.98%. Given Atmus Filtration Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe Atmus Filtration Technologies is more favorable than LCI Industries.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LCI Industries	2.47%	6.85%	3.10%
Atmus Filtration Technologies	10.03%	314.52%	17.61%

Risk & Volatility

LCI Industries has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Atmus Filtration Technologies has a beta of 1.74, meaning that its stock price is 74% more volatile than the S&P 500.

Valuation and Earnings

This table compares LCI Industries and Atmus Filtration Technologies’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LCI Industries	$3.82 billion	0.79	$64.19 million	$3.68	32.23
Atmus Filtration Technologies	$1.66 billion	1.70	$171.30 million	$1.96	17.23

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

Summary

Atmus Filtration Technologies beats LCI Industries on 10 of the 16 factors compared between the two stocks.

About LCI Industries

LCI Industries, together with its subsidiaries, manufactures and supplies engineered components for the manufacturers of recreational vehicles (RVs) and adjacent industries in the United States and internationally. It operates through two segments: Original Equipment Manufacturers (OEM) and Aftermarket. The OEM segment manufactures and distributes a range of engineered components, such as steel chassis and related components; axles, ABS, and suspension solutions; slide-out mechanisms and solutions; thermoformed bath, kitchen, and other products; vinyl, aluminum, and frameless windows; manual, electric, and hydraulic stabilizer and leveling systems; entry, luggage, patio, and ramp doors; furniture and mattresses; electric and manual entry steps; awnings and awning accessories; electronic components; appliances; air conditioners; televisions and sound systems; tankless water heaters; towing products; truck accessories; and other accessories. This segment serves OEMs of RVs and adjacent industries, including buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; boats; trains; manufactured homes; and modular housing. The Aftermarket segment supplies engineered components to aftermarket channels of the recreation and transportation markets for retail dealers, wholesale distributors, and service centers, as well as direct to retail customers through the Internet. This segment also sells replacement glass and awnings to fulfill insurance claims; and biminis, covers, buoys, fenders to the marine industry, towing products, truck accessories, appliances, air conditioners, televisions, sound systems, and tankless water heaters. The company was formerly known as Drew Industries Incorporated and changed its name to LCI Industries in December 2016. LCI Industries was founded in 1956 and is based in Elkhart, Indiana.

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.