Douglas Dynamics (PLOW) versus PACCAR (PCAR) Critical Analysis
Douglas Dynamics (NYSE: PLOW) and PACCAR (NASDAQ:PCAR) are both auto/tires/trucks companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.
Volatility and Risk
Douglas Dynamics has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500. Comparatively, PACCAR has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.
This is a summary of recent ratings and price targets for Douglas Dynamics and PACCAR, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Douglas Dynamics currently has a consensus price target of $42.00, indicating a potential upside of 5.53%. PACCAR has a consensus price target of $75.53, indicating a potential upside of 8.53%. Given PACCAR’s higher probable upside, analysts plainly believe PACCAR is more favorable than Douglas Dynamics.
Earnings & Valuation
This table compares Douglas Dynamics and PACCAR’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Douglas Dynamics||$416.27 million||2.16||$39.00 million||$1.34||29.70|
|PACCAR||$17.03 billion||1.44||$521.70 million||$3.90||17.84|
PACCAR has higher revenue and earnings than Douglas Dynamics. PACCAR is trading at a lower price-to-earnings ratio than Douglas Dynamics, indicating that it is currently the more affordable of the two stocks.
Douglas Dynamics pays an annual dividend of $0.96 per share and has a dividend yield of 2.4%. PACCAR pays an annual dividend of $1.00 per share and has a dividend yield of 1.4%. Douglas Dynamics pays out 71.6% of its earnings in the form of a dividend. PACCAR pays out 25.6% 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. PACCAR has raised its dividend for 4 consecutive years.
This table compares Douglas Dynamics and PACCAR’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
91.4% of Douglas Dynamics shares are owned by institutional investors. Comparatively, 62.4% of PACCAR shares are owned by institutional investors. 3.2% of Douglas Dynamics shares are owned by company insiders. Comparatively, 2.6% of PACCAR shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
PACCAR beats Douglas Dynamics on 11 of the 17 factors compared between the two stocks.
About Douglas Dynamics
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.
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.
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