Nikola (OTCMKTS:NKLAQ) & Harley-Davidson (NYSE:HOG) Critical Analysis

Harley-Davidson (NYSE:HOG) and Nikola (OTCMKTS:NKLAQ) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Harley-Davidson and Nikola, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Harley-Davidson	2	5	4	1	2.33
Nikola	0	0	0	0	0.00

Harley-Davidson currently has a consensus target price of $26.78, suggesting a potential downside of 3.88%. Given Harley-Davidson’s stronger consensus rating and higher probable upside, research analysts clearly believe Harley-Davidson is more favorable than Nikola.

Earnings & Valuation

This table compares Harley-Davidson and Nikola”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Harley-Davidson	$4.24 billion	0.68	$338.74 million	$1.63	17.09
Nikola	$68.86 million	0.01	-$958.23 million	($17.49)	-0.00

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

Volatility & Risk

Harley-Davidson has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, Nikola has a beta of 2.1, meaning that its stock price is 110% more volatile than the S&P 500.

Insider and Institutional Ownership

85.1% of Harley-Davidson shares are held by institutional investors. Comparatively, 37.4% of Nikola shares are held by institutional investors. 1.0% of Harley-Davidson shares are held by company insiders. Comparatively, 0.7% of Nikola shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Harley-Davidson and Nikola’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Harley-Davidson	4.78%	6.28%	2.45%
Nikola	N/A	N/A	N/A

Summary

Harley-Davidson beats Nikola on 14 of the 15 factors compared between the two stocks.

About Harley-Davidson

Harley-Davidson, Inc. manufactures and sells motorcycles in the United States and internationally. The company operates in three segments: Harley-Davidson Motor Company, LiveWire, and Harley-Davidson Financial Services. The Harley-Davidson Motor Company segment designs, manufactures, and sells motorcycles, including cruiser, trike, touring, standard, sportbike, adventure, and dual sport, as well as motorcycle parts, accessories, and apparel, as well as licenses its trademarks and related services. This segment sells its products to retail customers through a network of independent dealers, as well as e-commerce channels. The LiveWire segment sells electric motorcycles, balance bikes for kids, parts and accessories, apparel, and related parts and services. The Harley-Davidson Financial Services segment provides wholesale financing services, such as floorplan and open account financing of motorcycles, and parts and accessories; and retail financing services, such as installment lending for the purchase of new and used Harley-Davidson motorcycles, as well as point-of-sale insurance and voluntary protection products. This segment also licenses third-party financial institutions that issue credit cards bearing the Harley-Davidson brand. Harley-Davidson, Inc. was founded in 1903 and is based in Milwaukee, Wisconsin.

About Nikola

Nikola Corporation operates as a technology innovator and integrator that develops energy and transportation solutions in the United States and internationally. The company operates in truck and energy units. It commercializes battery electric vehicles (BEV) and hydrogen fuel cell electric vehicles (FCEV) to the trucking sector. In addition, it develops a network of hydrogen fueling stations; and offers BEV charging solutions for its FCEV and BEV customers, as well as other third-party customers. Further, its products include Nikola Tre Class 8 truck and the Nikola's Class 8 FCEV. Additionally, the company assembles, integrates, and commissions its vehicles in collaboration with its business partners and suppliers. Nikola Corporation founded in 2015 and is headquartered in Phoenix, Arizona.