PACCAR (NASDAQ: PCAR) and Douglas Dynamics (NYSE:PLOW) are both auto/tires/trucks companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.
This is a summary of current recommendations and price targets for PACCAR and Douglas Dynamics, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
PACCAR currently has a consensus target price of $75.53, indicating a potential upside of 8.96%. Douglas Dynamics has a consensus target price of $42.00, indicating a potential upside of 5.53%. Given PACCAR’s higher probable upside, research analysts clearly believe PACCAR is more favorable than Douglas Dynamics.
PACCAR pays an annual dividend of $1.00 per share and has a dividend yield of 1.4%. Douglas Dynamics pays an annual dividend of $0.96 per share and has a dividend yield of 2.4%. PACCAR pays out 25.6% of its earnings in the form of a dividend. Douglas Dynamics pays out 71.6% 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. Douglas Dynamics has increased its dividend for 4 consecutive years. Douglas Dynamics is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares PACCAR and Douglas Dynamics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares PACCAR and Douglas Dynamics’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|PACCAR||$17.03 billion||1.43||$521.70 million||$3.90||17.77|
|Douglas Dynamics||$416.27 million||2.16||$39.00 million||$1.34||29.70|
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.
Institutional & Insider Ownership
63.0% of PACCAR shares are owned by institutional investors. Comparatively, 91.4% of Douglas Dynamics shares are owned by institutional investors. 2.6% of PACCAR shares are owned by insiders. Comparatively, 3.2% of Douglas Dynamics shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Volatility & Risk
PACCAR has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Douglas Dynamics has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.
PACCAR beats Douglas Dynamics on 10 of the 17 factors compared between the two stocks.
PACCAR Company Profile
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.
Douglas Dynamics Company Profile
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.
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