PACCAR (NASDAQ: PCAR) and CNH Industrial (NYSE:CNHI) are both large-cap auto/tires/trucks companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.
Risk & Volatility
PACCAR has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, CNH Industrial has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.
This is a summary of current recommendations and price targets for PACCAR and CNH Industrial, as reported by MarketBeat.
||Strong Buy Ratings
PACCAR currently has a consensus target price of $74.67, suggesting a potential upside of 6.51%. CNH Industrial has a consensus target price of $13.43, suggesting a potential upside of 1.92%. Given PACCAR’s higher probable upside, equities analysts plainly believe PACCAR is more favorable than CNH Industrial.
PACCAR pays an annual dividend of $1.00 per share and has a dividend yield of 1.4%. CNH Industrial pays an annual dividend of $0.12 per share and has a dividend yield of 0.9%. PACCAR pays out 25.6% of its earnings in the form of a dividend. CNH Industrial pays out 37.5% 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. PACCAR is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
62.4% of PACCAR shares are held by institutional investors. Comparatively, 18.2% of CNH Industrial shares are held by institutional investors. 2.6% of PACCAR shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares PACCAR and CNH Industrial’s gross revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
PACCAR has higher earnings, but lower revenue than CNH Industrial. PACCAR is trading at a lower price-to-earnings ratio than CNH Industrial, indicating that it is currently the more affordable of the two stocks.
This table compares PACCAR and CNH Industrial’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
PACCAR beats CNH Industrial on 13 of the 16 factors compared between the two stocks.
PACCAR Company Profile
PACCAR Inc (PACCAR) is a technology company. The Company’s segments include Truck, Parts and Financial Services. The Truck segment includes the design, manufacture and distribution of light-, medium- and heavy-duty commercial trucks. The Company’s trucks are marketed under the Kenworth, Peterbilt and DAF nameplates. It also manufactures engines, primarily for use in the Company’s trucks, at its facilities in Columbus, Mississippi; Eindhoven, the Netherlands, and Ponta Grossa, Brazil. The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles. The Financial Services segment includes finance and leasing products and services provided to customers and dealers. Its Other business includes the manufacturing and marketing of industrial winches. The Company operates in Australia and Brazil and sells trucks and parts to customers in Asia, Africa, Middle East and South America.
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.
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