Oshkosh (NYSE:OSK) & BRP (NASDAQ:DOOO) Critical Analysis

Oshkosh (NYSE:OSK) and BRP (NASDAQ:DOOO) are both mid-cap auto/tires/trucks companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, risk, profitability, institutional ownership, earnings and dividends.

Institutional & Insider Ownership

92.4% of Oshkosh shares are held by institutional investors. 0.6% of Oshkosh shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Oshkosh and BRP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oshkosh	6.43%	16.60%	7.39%
BRP	-0.34%	61.26%	4.21%

Earnings & Valuation

This table compares Oshkosh and BRP”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oshkosh	$10.33 billion	0.75	$681.40 million	$10.25	12.01
BRP	$5.44 billion	0.86	-$154.60 million	($0.24)	-267.83

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

Risk and Volatility

Oshkosh has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500. Comparatively, BRP has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.

Dividends

Oshkosh pays an annual dividend of $2.04 per share and has a dividend yield of 1.7%. BRP pays an annual dividend of $0.62 per share and has a dividend yield of 1.0%. Oshkosh pays out 19.9% of its earnings in the form of a dividend. BRP pays out -258.3% 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. Oshkosh has raised its dividend for 13 consecutive years and BRP has raised its dividend for 2 consecutive years. Oshkosh is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent recommendations for Oshkosh and BRP, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oshkosh	1	4	11	0	2.63
BRP	1	6	8	3	2.72

Oshkosh currently has a consensus price target of $145.15, indicating a potential upside of 17.94%. BRP has a consensus price target of $79.60, indicating a potential upside of 23.83%. Given BRP’s stronger consensus rating and higher probable upside, analysts clearly believe BRP is more favorable than Oshkosh.

Summary

Oshkosh beats BRP on 12 of the 18 factors compared between the two stocks.

About Oshkosh

Oshkosh Corporation provides purpose-built vehicles and equipment worldwide. The company operates through three segments: Access, Defense, and Vocational segment. Its Access Equipment segment design and manufacture aerial work platform and telehandlers for use in construction, industrial, and maintenance applications; offers financing and leasing solutions including rental fleet loans, leases, and floor plan and retail financing; and towing and recovery equipment, which includes carriers, wreckers, and rotators, as well as provides equipment installation and sale of chassis and service parts. The Defense segment engages in the manufacture and sale of heavy, medium, and light tactical wheeled vehicles and related services for department of defense. Its Vocational segment offers custom and commercial firefighting equipment, fire apparatus, and emergency vehicles, including pumpers, aerial platform, ladder and tiller trucks, and tankers; light, medium, and heavy-duty rescue vehicles; and wildland rough terrain response, bomb squad, hazardous materials control vehicles, mobile command and control centers, and other emergency response vehicles. Additionally, this segment produces and sells custom and commercial firefighting vehicles, as well as command vehicles, ARFF vehicles; design and manufacture refuse collection vehicles for waste services industry; front discharge concrete mixers for the concrete ready-mix industry; and field service vehicles and truck-mounted cranes for construction, equipment dealer, building supply, utility, tire service, railroad, and mining industries. Further, the company provides its products through direct sales representatives, dealers, and distributors. Oshkosh Corporation was formerly known as Oshkosh Truck Corporation. The company was founded in 1917 and is headquartered in Oshkosh, Wisconsin.

About BRP

BRP Inc., together with its subsidiaries, designs, develops, manufactures, distributes, and markets powersports vehicles and marine products in the United States, Canada, Europe, the Asia Pacific, Mexico, Austria, and internationally. The Powersports segment offers year-round products, such as Can-Am all-terrain vehicles, side-by-side vehicles, and three-wheeled vehicles; and seasonal products, including Ski-Doo and Lynx snowmobiles, Sea-Doo personal watercrafts and pontoons, Rotax engines for karts and recreational aircraft, and Pinion gearboxes with smart shift systems. The Marine segment provides Alumacraft, Manitou, Quintrex, Stacer, and Yellowfin boats; Rotax engines for jet boats; and Rotax S outboard engine. The company was formerly known as J.A. Bombardier (J.A.B.) Inc. and changed its name to BRP Inc. in April 2013. BRP Inc. was founded in 1937 and is headquartered in Valcourt, Canada.