Financial Analysis: Polaris (NYSE:PII) vs. Ford Motor (NYSE:F)

Ford Motor (NYSE:F) and Polaris (NYSE:PII) are both auto/tires/trucks companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Dividends

Ford Motor pays an annual dividend of $0.60 per share and has a dividend yield of 4.3%. Polaris pays an annual dividend of $2.68 per share and has a dividend yield of 4.2%. Ford Motor pays out 51.7% of its earnings in the form of a dividend. Polaris pays out -32.8% 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. Polaris has increased its dividend for 30 consecutive years.

Profitability

This table compares Ford Motor and Polaris’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ford Motor	2.48%	11.94%	1.87%
Polaris	-6.51%	-0.05%	-0.01%

Insider and Institutional Ownership

58.7% of Ford Motor shares are owned by institutional investors. Comparatively, 88.1% of Polaris shares are owned by institutional investors. 0.5% of Ford Motor shares are owned by company insiders. Comparatively, 3.1% of Polaris shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Ford Motor and Polaris”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ford Motor	$184.99 billion	0.30	$5.88 billion	$1.16	11.90
Polaris	$7.15 billion	0.51	-$465.50 million	($8.18)	-7.86

Ford Motor has higher revenue and earnings than Polaris. Polaris is trading at a lower price-to-earnings ratio than Ford Motor, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Ford Motor has a beta of 1.66, suggesting that its share price is 66% more volatile than the S&P 500. Comparatively, Polaris has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Ford Motor and Polaris, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ford Motor	2	12	4	1	2.21
Polaris	0	12	0	0	2.00

Ford Motor presently has a consensus target price of $13.19, indicating a potential downside of 4.48%. Polaris has a consensus target price of $59.80, indicating a potential downside of 7.04%. Given Ford Motor’s stronger consensus rating and higher probable upside, analysts plainly believe Ford Motor is more favorable than Polaris.

Summary

Ford Motor beats Polaris on 13 of the 18 factors compared between the two stocks.

About Ford Motor

Ford Motor Company develops, delivers, and services a range of Ford trucks, commercial cars and vans, sport utility vehicles, and Lincoln luxury vehicles worldwide. It operates through Ford Blue, Ford Model e, and Ford Pro; Ford Next; and Ford Credit segments. The company sells Ford and Lincoln vehicles, service parts, and accessories through distributors and dealers, as well as through dealerships to commercial fleet customers, daily rental car companies, and governments. It also engages in vehicle-related financing and leasing activities to and through automotive dealers. In addition, the company provides retail installment sale contracts for new and used vehicles; and direct financing leases for new vehicles to retail and commercial customers, such as leasing companies, government entities, daily rental companies, and fleet customers. Further, it offers wholesale loans to dealers to finance the purchase of vehicle inventory; and loans to dealers to finance working capital and enhance dealership facilities, purchase dealership real estate, and other dealer vehicle programs. The company was incorporated in 1903 and is based in Dearborn, Michigan.

About Polaris

Polaris Inc. designs, engineers, manufactures, and markets powersports vehicles in the United States, Canada, and internationally. It operates through three segments: Off-Road, On-Road, and Marine. The company offers off-road vehicles (ORVs), including all-terrain vehicles and side-by-side vehicles; military and commercial ORVs; snowmobiles; motorcycles; and moto-roadsters, quadricycles, and boats. It also provides ORV accessories comprising winches, bumper/brushguards, plows, racks, wheels and tires, pull-behinds, cab systems, lighting and audio systems, cargo box accessories, tracks, and oil; snowmobile accessories, which include covers, traction products, reverse kits, electric starters, tracks, bags, windshields, oil, and lubricants; and motorcycle accessories, such as saddle bags, handlebars, backrests, exhausts, windshields, seats, oil, and various chrome accessories. In addition, the company offers light duty hauling and passenger vehicles; gear and apparel, such as helmets, goggles, jackets, gloves, boots, bibs, hats, pants, and leathers; and pontoon and deck boats. The company provides its products through dealers and distributors, and online; and retail and e-commerce marketplaces. The company was formerly known as Polaris Industries Inc. Polaris Inc. was founded in 1945 and is headquartered in Medina, Minnesota.