Tennant (NYSE:TNC) versus Blue Bird (NASDAQ:BLBD) Critical Review

Tennant (NYSE:TNC) and Blue Bird (NASDAQ:BLBD) are both small-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Tennant and Blue Bird, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tennant	0	3	2	0	2.40
Blue Bird	1	0	6	1	2.88

Tennant presently has a consensus target price of $87.00, suggesting a potential upside of 17.90%. Blue Bird has a consensus target price of $85.33, suggesting a potential upside of 49.22%. Given Blue Bird’s stronger consensus rating and higher probable upside, analysts clearly believe Blue Bird is more favorable than Tennant.

Valuation & Earnings

This table compares Tennant and Blue Bird”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tennant	$1.20 billion	1.04	$43.80 million	$1.34	55.07
Blue Bird	$1.48 billion	1.21	$127.72 million	$8.22	6.96

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

Insider & Institutional Ownership

93.3% of Tennant shares are owned by institutional investors. Comparatively, 93.6% of Blue Bird shares are owned by institutional investors. 3.5% of Tennant shares are owned by insiders. Comparatively, 1.1% of Blue Bird shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Tennant and Blue Bird’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tennant	1.85%	13.30%	5.78%
Blue Bird	17.48%	39.97%	18.93%

Risk & Volatility

Tennant has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500. Comparatively, Blue Bird has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

Summary

Blue Bird beats Tennant on 13 of the 15 factors compared between the two stocks.

About Tennant

Tennant Company, together with its subsidiaries, designs, manufactures, and markets floor cleaning equipment in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers a suite of products, including floor maintenance and cleaning equipment, detergent-free and other sustainable cleaning technologies, aftermarket parts and consumables, equipment maintenance and repair services, and asset management solutions. It provides business solutions, such as financing, rental, and leasing programs, as well as machine-to-machine asset management solutions. The company offers its products under the Tennant, Nobles, Alfa Uma Empresa Tennant, IPC, Gaomei, and Rongen brands, as well as private-label brands. Its products are used in retail establishments and distribution centers; factories and warehouses; and public venues, such as arenas and stadiums, office buildings, schools and universities, hospitals and clinics, and other environments. The company markets its products to contract cleaners and businesses through direct sales and service organizations, as well as through a network of authorized distributors. Tennant Company was founded in 1870 and is headquartered in Eden Prairie, Minnesota.

About Blue Bird

Blue Bird Corporation, together with its subsidiaries, designs, engineers, manufactures, and sells school buses in the United States, Canada, and internationally. The company operates through two segments, Bus and Parts. It offers Type C, Type D, and specialty buses; and alternative power options through its propane powered, gasoline powered, compressed natural gas powered, and electric powered school buses, as well as diesel engines. The company also sells replacement bus parts; and provides financing services and extended warranties related to its products. Blue Bird Corporation sells its products through drop ship and a network of dealers, as well as directly to fleet operators, the United States government, and state governments; independent service centers; and maintains a parts distribution center. Blue Bird Corporation was founded in 1927 and is headquartered in Macon, Georgia.