Lithia Motors (LAD) vs. Rush Enterprises (RUSHB) Head-To-Head Comparison

Rush Enterprises (NASDAQ:RUSHB) and Lithia Motors (NYSE:LAD) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Analyst Ratings

This is a summary of recent ratings and price targets for Rush Enterprises and Lithia Motors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rush Enterprises 0 0 0 0 N/A
Lithia Motors 0 1 5 0 2.83

Lithia Motors has a consensus price target of $106.75, suggesting a potential upside of 24.68%. Given Lithia Motors’ higher probable upside, analysts plainly believe Lithia Motors is more favorable than Rush Enterprises.

Valuation and Earnings

This table compares Rush Enterprises and Lithia Motors’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rush Enterprises $4.71 billion 0.32 $172.12 million N/A N/A
Lithia Motors $10.09 billion 0.20 $245.21 million $8.39 10.21

Lithia Motors has higher revenue and earnings than Rush Enterprises.

Insider & Institutional Ownership

9.9% of Rush Enterprises shares are owned by institutional investors. 13.9% of Rush Enterprises shares are owned by company insiders. Comparatively, 6.2% of Lithia Motors shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Rush Enterprises has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Lithia Motors has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.

Dividends

Rush Enterprises pays an annual dividend of $0.48 per share and has a dividend yield of 1.2%. Lithia Motors pays an annual dividend of $1.16 per share and has a dividend yield of 1.4%. Lithia Motors pays out 13.8% of its earnings in the form of a dividend. Lithia Motors has raised its dividend for 8 consecutive years. Lithia Motors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Rush Enterprises and Lithia Motors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rush Enterprises 3.83% 12.85% 4.52%
Lithia Motors 2.56% 20.75% 4.72%

Summary

Lithia Motors beats Rush Enterprises on 9 of the 15 factors compared between the two stocks.

Rush Enterprises Company Profile

Rush Enterprises, Inc., through its subsidiaries, operates as an integrated retailer of commercial vehicles and related services in the United States. The company operates a network of commercial vehicle dealerships under the Rush Truck Centers name. Its Rush Truck Centers primarily sell commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, Mitsubishi Fuso, IC Bus, or Blue Bird; provides new and used commercial vehicles, and aftermarket parts, as well as service and repair, financing, and leasing and rental services; and offers property and casualty insurance, including collision and liability insurance on commercial vehicles, cargo insurance, and credit life insurance to its commercial vehicle customers. The company also offers equipment installation and repair, parts installation, and paint and body repair services; new vehicle pre-delivery inspection, truck modification, and natural gas fuel system installation services; and body, chassis upfit, and component installation services, as well as sells tires for use on commercial vehicles. It serves regional and national truck fleets, corporations, local governments, and owner operators. The company operates a network of centers located in the states of Alabama, Arizona, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Missouri, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Tennessee, Texas, Utah, and Virginia. Rush Enterprises, Inc. was founded in 1965 and is headquartered in New Braunfels, Texas.

Lithia Motors Company Profile

Lithia Motors, Inc. operates automotive franchises, and retails new and used vehicles in the United States. The company operates in three segments: Domestic, Import, and Luxury. It sells new and used cars, replacement parts, vehicle service contracts, vehicle protection products, and credit insurance products; provides vehicle maintenance, warranty, paint, and repair services; and arranges related financing. As of February 23, 2018, the company offered 30 brands of new vehicles and various brands of used vehicles in 171 stores in the United States, as well as through online at approximately 200 Websites. Lithia Motors, Inc. was founded in 1946 and is headquartered in Medford, Oregon.

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