Reviewing Douglas Dynamics (NYSE:PLOW) and CarGurus (NASDAQ:CARG)

CarGurus (NASDAQ:CARG) and Douglas Dynamics (NYSE:PLOW) are both auto/tires/trucks companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Volatility & Risk

CarGurus has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500. Comparatively, Douglas Dynamics has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500.

Profitability

This table compares CarGurus and Douglas Dynamics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CarGurus	4.28%	32.54%	20.08%
Douglas Dynamics	11.00%	15.17%	6.21%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for CarGurus and Douglas Dynamics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CarGurus	0	6	6	0	2.50
Douglas Dynamics	0	1	1	0	2.50

CarGurus presently has a consensus target price of $37.86, indicating a potential upside of 10.39%. Douglas Dynamics has a consensus target price of $29.00, indicating a potential downside of 4.45%. Given CarGurus’ higher possible upside, analysts plainly believe CarGurus is more favorable than Douglas Dynamics.

Insider & Institutional Ownership

86.9% of CarGurus shares are held by institutional investors. Comparatively, 91.8% of Douglas Dynamics shares are held by institutional investors. 17.2% of CarGurus shares are held by insiders. Comparatively, 2.5% of Douglas Dynamics shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares CarGurus and Douglas Dynamics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CarGurus	$894.38 million	4.00	$20.97 million	$0.35	98.00
Douglas Dynamics	$587.92 million	1.20	$56.15 million	$2.72	11.16

Douglas Dynamics has lower revenue, but higher earnings than CarGurus. Douglas Dynamics is trading at a lower price-to-earnings ratio than CarGurus, indicating that it is currently the more affordable of the two stocks.

Summary

CarGurus beats Douglas Dynamics on 9 of the 13 factors compared between the two stocks.

About CarGurus

CarGurus, Inc. operates an online automotive platform for buying and selling vehicles in the United States and internationally. It operates through two segments, U.S. Marketplace and Digital Wholesale. The company provides an online automotive marketplace where customers can search for new and used car listings from its dealers and sell their car to dealers and other consumers; and paid listings subscriptions for enhanced access to its marketplace that connects dealers to a large audience of informed and engaged consumers. It also offers dealer and non-dealer advertising products for its websites and social media platforms. The company operates online marketplaces under the CarGurus brand in the United States, Canada, and the United Kingdom; Autolist and CarOffer brands in the United States; and PistonHeads brand in the United Kingdom. The company was formerly known as CarGurus LLC and changed its name to CarGurus, Inc. in June 2015. CarGurus, Inc. was founded in 2005 and is headquartered in Cambridge, Massachusetts.

About Douglas Dynamics

Douglas Dynamics, Inc. operates as a manufacturer and upfitter of commercial work truck attachments and equipment in North America. It operates through two segments, Work Truck Attachments and Work Truck Solutions. The Work Truck Attachments segment manufactures and sells snow and ice control attachments, including snowplows, and sand and salt spreaders for light trucks and heavy duty trucks, as well as various related parts and accessories. The Work Truck Solutions segment primarily manufactures municipal snow and ice control products; provides truck and vehicle upfits where it attaches component pieces of equipment, truck bodies, racking, and storage solutions to a vehicle chassis for use by end users for work related purposes; and manufactures storage solutions for trucks and vans, and cable pulling equipment for trucks. This segment also offers up-fit and storage solutions. It also provides customized turnkey solutions to governmental agencies, such as Departments of Transportation and municipalities. The company sells its products under the FISHER, SNOWEX, WESTERN, TURFEX, SWEEPEX, HENDERSON, BRINEXTREME, and DEJANA brands. It distributes its products primarily to professional snowplowers who are contracted to remove snow and ice from commercial and residential areas. The company was founded in 1948 and is headquartered in Milwaukee, Wisconsin.