Titan Machinery (NASDAQ:TITN) vs. Group 1 Automotive (NYSE:GPI) Critical Survey

Titan Machinery (NASDAQ:TITN) and Group 1 Automotive (NYSE:GPI) are both retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Titan Machinery and Group 1 Automotive, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Titan Machinery	0	2	3	2	3.00
Group 1 Automotive	0	3	5	0	2.63

Titan Machinery currently has a consensus target price of $21.00, suggesting a potential downside of 2.78%. Group 1 Automotive has a consensus target price of $473.00, suggesting a potential upside of 1.48%. Given Group 1 Automotive’s higher probable upside, analysts clearly believe Group 1 Automotive is more favorable than Titan Machinery.

Volatility and Risk

Titan Machinery has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500. Comparatively, Group 1 Automotive has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Profitability

This table compares Titan Machinery and Group 1 Automotive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Titan Machinery	-2.23%	-8.22%	-2.64%
Group 1 Automotive	2.27%	17.96%	5.50%

Insider and Institutional Ownership

78.4% of Titan Machinery shares are owned by institutional investors. Comparatively, 99.9% of Group 1 Automotive shares are owned by institutional investors. 10.8% of Titan Machinery shares are owned by insiders. Comparatively, 2.1% of Group 1 Automotive shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Titan Machinery and Group 1 Automotive”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Titan Machinery	$2.67 billion	0.19	-$36.91 million	($2.63)	-8.21
Group 1 Automotive	$20.97 billion	0.29	$498.10 million	$35.62	13.09

Group 1 Automotive has higher revenue and earnings than Titan Machinery. Titan Machinery is trading at a lower price-to-earnings ratio than Group 1 Automotive, indicating that it is currently the more affordable of the two stocks.

Summary

Group 1 Automotive beats Titan Machinery on 11 of the 15 factors compared between the two stocks.

About Titan Machinery

Titan Machinery Inc. owns and operates a network of full service agricultural and construction equipment stores in the United States, Europe, and Australia. It operates through four segments: Agriculture, Construction, Europe, and Australia. The company sells new and used equipment, including agricultural and construction equipment manufactured under the CNH Industrial family of brands, as well as equipment from various other manufacturers. Its agricultural equipment includes machinery and attachments for use in the production of food, fiber, feed grain, feed stock, and renewable energy; and home and garden applications, as well as maintenance of commercial, residential, and government properties. The company’s construction equipment comprises heavy construction machinery, light industrial machinery for commercial and residential construction, and road and highway construction machinery. It also sells maintenance and replacement parts. In addition, the company offers repair and maintenance services that include warranty repairs, off-site and on-site repair services, scheduling off-season maintenance services, and notifying customers of periodic service requirements; and training programs to customers. Further, it rents equipment; and provides ancillary equipment support services, such as equipment transportation, global positioning system signal subscriptions and other precision farming products, farm data management products, and CNH Industrial finance and insurance products. The company operates in Colorado, Idaho, Kansas, Missouri, Washington, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin, and Wyoming, the United States; Bulgaria, Germany, Romania, and Ukraine, Europe; and New South Wales, South Australia, and Victoria, Australia. Titan Machinery Inc. was founded in 1980 and is headquartered in West Fargo, North Dakota.

About Group 1 Automotive

Group 1 Automotive, Inc., through its subsidiaries, operates in the automotive retail industry in the United States and the United Kingdom. The company sells new and used cars, light trucks, and vehicle parts, as well as service and insurance contracts; arranges related vehicle financing; and offers automotive maintenance and repair services. Group 1 Automotive, Inc. was incorporated in 1995 and is headquartered in Houston, Texas.