Financial Analysis: Patrick Industries (NASDAQ:PATK) vs. Dorman Products (NASDAQ:DORM)

Dorman Products (NASDAQ:DORM) and Patrick Industries (NASDAQ:PATK) are both mid-cap auto/tires/trucks companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Earnings & Valuation

This table compares Dorman Products and Patrick Industries’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dorman Products $991.33 million 3.20 $83.76 million $2.65 37.32
Patrick Industries $2.34 billion 0.95 $89.57 million $3.85 24.32

Patrick Industries has higher revenue and earnings than Dorman Products. Patrick Industries is trading at a lower price-to-earnings ratio than Dorman Products, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Dorman Products and Patrick Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dorman Products 8.58% 11.24% 7.95%
Patrick Industries 3.50% 15.75% 5.23%

Volatility and Risk

Dorman Products has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Patrick Industries has a beta of 2.41, suggesting that its share price is 141% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Dorman Products and Patrick Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dorman Products 0 0 0 0 N/A
Patrick Industries 0 1 4 0 2.80

Patrick Industries has a consensus target price of $79.60, suggesting a potential downside of 14.98%. Given Patrick Industries’ higher probable upside, analysts plainly believe Patrick Industries is more favorable than Dorman Products.

Institutional & Insider Ownership

76.5% of Dorman Products shares are owned by institutional investors. Comparatively, 88.5% of Patrick Industries shares are owned by institutional investors. 11.1% of Dorman Products shares are owned by insiders. Comparatively, 7.6% of Patrick Industries shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Patrick Industries beats Dorman Products on 8 of the 13 factors compared between the two stocks.

About Dorman Products

Dorman Products, Inc. supplies replacement parts and fasteners for passenger cars, light trucks, and heavy-duty trucks in the automotive aftermarket industry in the United States, Canada, Mexico, Europe, the Middle East, and Australia. It offers original equipment dealer products, such as intake and exhaust manifolds, window regulators, radiator fan assemblies, tire pressure monitor sensors, exhaust gas recirculation coolers, and complex electronics modules; fluid reservoirs, variable valve timing components, complex electronics, and integrated door lock actuators; and oil drain plugs, and wheel bolts and lug nuts. The company also provides automotive replacement parts comprising door handles, keyless remotes and cases, and door hinge repairs; and heavy duty aftermarket parts for class 4-8 vehicles, such as lighting, cooling, engine management, wheel hardware, air tanks, and cab products. In addition, it offers powertrain products, including cooling products, harmonic balancers, fluid lines and reservoirs, connectors, 4-wheel drive components, other engine, and transmission and axle components; and chassis products consisting of control arms, brake hardware and hydraulics, axle hardware, suspension arms, knuckles, links, bushings, and other suspension, steering, and brake components. Further, it provides automotive body products, such as window lift motors, switches and handles, wiper, and other interior and exterior automotive body components; and hardware products comprising threaded bolts; auto body and home electrical wiring components; and other hardware assortments and merchandise. The company offers its products under the OE Solutions, HELP!, and HD Solutions brands through automotive aftermarket retailers, including on-line platforms; national, regional, and local warehouse distributors; and specialty markets; salvage yards; local independent parts wholesalers; and mass merchants. The company was founded in 1918 and is headquartered in Colmar, Pennsylvania.

About Patrick Industries

Patrick Industries, Inc. manufactures and distributes components, building products, and materials for the recreational vehicle, marine, manufactured housing, and industrial markets in the United States and Canada. Its Manufacturing segment manufactures and sells furniture, shelving, wall, countertop, and cabinet product; cabinet door, fiberglass bath fixture, and tile system; hardwood furniture, vinyl printing, solid surface, granite, and quartz countertop fabrication aluminum product; RV painting; decorative vinyl and paper laminated panel; fiberglass and plastic component; softwoods lumber; custom cabinet; polymer-based flooring product; marine hardware; air handling; and electrical system and component, including instrument and dash panel, and other product. This segment also provides wrapped vinyl, paper, and hardwood profile moulding; interior passage door; slide-out trim and fascia product; thermoformed shower surround; specialty bath and closet building product; treated, untreated, and laminated plywood; fiberglass and plastic helm systems and component; wiring and wire harnesses; aluminum and plastic fuel tank; boat cover, tower, top, and frame; CNC molds and composite part; and slotwall panel and component. The company's Distribution segment distributes pre-finished wall and ceiling panel, drywall and finishing product, electronic, audio system component, appliance, wiring product, electrical and plumbing product, cement siding product, raw and processed lumber, fiber reinforced polyester product, roofing, laminate and ceramic flooring product, shower door, furniture, fireplace and surround, interior and exterior lighting product, and other product. This segment also offers transportation and logistics service. The company was founded in 1959 and is headquartered in Elkhart, Indiana.

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