Critical Comparison: CNH Industrial (CNHI) & Douglas Dynamics (PLOW)

CNH Industrial (NYSE: CNHI) and Douglas Dynamics (NYSE:PLOW) are both auto/tires/trucks companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, institutional ownership, valuation and profitability.

Valuation & Earnings

This table compares CNH Industrial and Douglas Dynamics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CNH Industrial $24.87 billion 0.82 -$252.00 million $0.32 46.69
Douglas Dynamics $416.27 million 2.24 $39.00 million $1.34 30.78

Douglas Dynamics has lower revenue, but higher earnings than CNH Industrial. Douglas Dynamics is trading at a lower price-to-earnings ratio than CNH Industrial, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

CNH Industrial has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Douglas Dynamics has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for CNH Industrial and Douglas Dynamics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CNH Industrial 0 3 6 0 2.67
Douglas Dynamics 0 0 2 0 3.00

CNH Industrial presently has a consensus target price of $14.49, indicating a potential downside of 3.03%. Douglas Dynamics has a consensus target price of $42.00, indicating a potential upside of 1.82%. Given Douglas Dynamics’ stronger consensus rating and higher possible upside, analysts clearly believe Douglas Dynamics is more favorable than CNH Industrial.

Institutional and Insider Ownership

18.2% of CNH Industrial shares are held by institutional investors. Comparatively, 90.2% of Douglas Dynamics shares are held by institutional investors. 3.2% of Douglas Dynamics shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares CNH Industrial and Douglas Dynamics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CNH Industrial 1.66% 14.63% 1.41%
Douglas Dynamics 6.59% 13.98% 4.58%

Dividends

CNH Industrial pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. Douglas Dynamics pays an annual dividend of $0.96 per share and has a dividend yield of 2.3%. CNH Industrial pays out 37.5% of its earnings in the form of a dividend. Douglas Dynamics pays out 71.6% 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. Douglas Dynamics has increased its dividend for 5 consecutive years. Douglas Dynamics is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Douglas Dynamics beats CNH Industrial on 12 of the 17 factors compared between the two stocks.

CNH Industrial Company Profile

CNH Industrial N.V. is a capital goods company. The Company is engaged in the design, production, marketing, sale and financing of agricultural and construction equipment, trucks, commercial vehicles, buses and specialty vehicles for firefighting, defense and other uses, as well as engines, transmissions and axles for vehicles and engines under marine and power generation applications. Its segments include Agricultural Equipment, which designs, manufactures and distributes farm machinery and implements; Construction Equipment, which designs, manufactures and distributes construction equipment; Commercial Vehicles, which designs, produces and sells a range of light, medium and heavy vehicles for the transportation and distribution of goods; Powertrain, which designs, manufactures and offers a range of propulsion and transmission systems, and axles for on- and off-road applications, and Financial Services, which offers a range of financial services to dealers and customers.

Douglas Dynamics Company Profile

Douglas Dynamics, Inc. is a manufacturer and up-fitter of commercial vehicle attachments and equipment. The Company’s portfolio includes snow and ice management attachments sold under the BLIZZARD, FISHER, HENDERSON, SNOWEX and WESTERN brands, turf care equipment under the TURFEX brand and industrial maintenance equipment under the SWEEPEX brand. The Company operates through two segments: Work Truck Attachments and Work Truck Solutions. The Work Truck Attachments segment includes snow and ice management attachments sold under the FISHER, WESTERN, HENDERSON and SNOWEX brands. The Work Truck Solutions segment includes the up-fit of attachments and storage solutions for commercial work vehicles under the DEJANA brand and its related sub-brands. In its Work Truck Attachments segment, the Company offers a product line of snowplows, and sand and salt spreaders for light and heavy duty trucks. Its Work Truck Solutions products consist of truck and vehicle up-fits.

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