Spartan Motors (SPAR) and Westport Fuel Systems (NASDAQ:WPRT) Financial Analysis

Westport Fuel Systems (NASDAQ: WPRT) and Spartan Motors (NASDAQ:SPAR) are both small-cap auto/tires/trucks companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Institutional and Insider Ownership

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20.4% of Westport Fuel Systems shares are owned by institutional investors. Comparatively, 66.5% of Spartan Motors shares are owned by institutional investors. 3.7% of Spartan 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.

Analyst Recommendations

This is a breakdown of current ratings for Westport Fuel Systems and Spartan Motors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westport Fuel Systems 0 1 5 0 2.83
Spartan Motors 0 0 4 0 3.00

Westport Fuel Systems presently has a consensus target price of $4.08, indicating a potential upside of 79.88%. Spartan Motors has a consensus target price of $20.00, indicating a potential upside of 23.46%. Given Westport Fuel Systems’ higher probable upside, equities research analysts plainly believe Westport Fuel Systems is more favorable than Spartan Motors.

Earnings and Valuation

This table compares Westport Fuel Systems and Spartan Motors’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Westport Fuel Systems $247.10 million 1.21 -$9.97 million ($0.44) -5.16
Spartan Motors $707.10 million 0.80 $15.93 million $0.43 37.67

Spartan Motors has higher revenue and earnings than Westport Fuel Systems. Westport Fuel Systems is trading at a lower price-to-earnings ratio than Spartan Motors, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Westport Fuel Systems has a beta of 1.89, meaning that its stock price is 89% more volatile than the S&P 500. Comparatively, Spartan Motors has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.

Profitability

This table compares Westport Fuel Systems and Spartan Motors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Westport Fuel Systems -4.08% -50.05% -16.86%
Spartan Motors 2.25% 9.32% 4.83%

Dividends

Spartan Motors pays an annual dividend of $0.10 per share and has a dividend yield of 0.6%. Westport Fuel Systems does not pay a dividend. Spartan Motors pays out 23.3% of its earnings in the form of a dividend.

Summary

Spartan Motors beats Westport Fuel Systems on 11 of the 16 factors compared between the two stocks.

About Westport Fuel Systems

Westport Fuel Systems Inc, formerly Westport Innovations Inc, is a Canada-based provider of low-emission engine and fuel system technologies utilizing gaseous fuels. It operates through the Westport Operations segment. The Westport Operations segment designs, manufactures and sells compressed natural gas, liquefied natural gas, and liquefied petroleum gas components and systems to original equipment manufacturers and to aftermarket customers. Its subsidiaries design and manufacture a range of components, including pressure regulators, injectors, electronic control units, valves and filters; sell mono-fuel, bi-fuel and dual-fuel diesel blend conversion kits, and also offer full engine management systems and solutions. The Westport Operations segment has a customer base in Europe and North America, as well as in Asia, South America, and Africa.

About Spartan Motors

Spartan Motors, Inc., through its subsidiaries, engineers, manufactures, and sells heavy-duty and purpose-built specialty vehicles in the United States, Canada, South America, and Asia. It operates through three segments: Fleet Vehicles and Services, Emergency Response Vehicles, and Specialty Chassis and Vehicles. The Fleet Vehicles and Services segment provides walk-in vans, cutaway vans, truck bodies, and parts and accessories for use in e-commerce/last mile/parcel delivery, beverage and grocery delivery, mobile retail, and trades and construction industries under the Aeromaster, Velocity, Ultimate, Trademaster, Metromaster, Utilivan, Spartan Upfit Services, and Reach brands. This segment also installs specialty interior and exterior up-fit equipment for walk-in vans, truck bodies, and passenger vans under Specialty Up-fit name; and distributes related aftermarket parts and accessories. The Emergency Response Vehicles segment provides emergency response cabs and chassis, pumpers, aerial ladder components for fire trucks, rescue equipment, tankers, and parts and accessories under the Spartan, Smeal, Ladder Tower, and UST brands, as well as offers body, aerial, pump, drivetrain, and chassis repair and maintenance services. The Specialty Chassis and Vehicles segment offers motor home chassis; and defense and specialty chassis and vehicles, as well as provides related aftermarket parts and accessories, and maintenance and repair services. This segment also offers assembly services for Isuzu N-gas and F-series chassis. The company sells its products through a network of independent truck dealers, original equipment manufacturers, dealer distributors, leasing companies, and municipalities and other governmental entities, as well as to commercial and individual end users. Spartan Motors, Inc. was founded in 1975 and is headquartered in Charlotte, Michigan.

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