REV Group (NYSE:REVG) vs. Parker-Hannifin (NYSE:PH) Financial Contrast

Parker-Hannifin (NYSE:PH) and REV Group (NYSE:REVG) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Volatility & Risk

Parker-Hannifin has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500. Comparatively, REV Group has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.

Profitability

This table compares Parker-Hannifin and REV Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Parker-Hannifin	16.97%	28.48%	13.49%
REV Group	3.86%	31.67%	10.30%

Earnings and Valuation

This table compares Parker-Hannifin and REV Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Parker-Hannifin	$21.50 billion	5.64	$3.65 billion	$28.49	33.78
REV Group	$2.46 billion	1.27	$95.20 million	$1.91	33.46

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

Institutional & Insider Ownership

82.4% of Parker-Hannifin shares are held by institutional investors. 0.3% of Parker-Hannifin shares are held by company insiders. Comparatively, 1.7% of REV Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Parker-Hannifin pays an annual dividend of $8.00 per share and has a dividend yield of 0.8%. REV Group pays an annual dividend of $0.24 per share and has a dividend yield of 0.4%. Parker-Hannifin pays out 28.1% of its earnings in the form of a dividend. REV Group pays out 12.6% 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. Parker-Hannifin has increased its dividend for 70 consecutive years and REV Group has increased its dividend for 1 consecutive years. Parker-Hannifin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings for Parker-Hannifin and REV Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Parker-Hannifin	0	2	17	0	2.89
REV Group	0	2	1	1	2.75

Parker-Hannifin presently has a consensus target price of $1,114.55, suggesting a potential upside of 15.81%. REV Group has a consensus target price of $55.67, suggesting a potential downside of 12.88%. Given Parker-Hannifin’s stronger consensus rating and higher possible upside, analysts clearly believe Parker-Hannifin is more favorable than REV Group.

Summary

Parker-Hannifin beats REV Group on 13 of the 18 factors compared between the two stocks.

About Parker-Hannifin

Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. The company operates through two segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial segment offers sealing, shielding, thermal products and systems, adhesives, coatings, and noise vibration and harshness solutions; filters, systems, and diagnostics solutions to ensure purity and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors used in fluid and gas handling; and hydraulic, pneumatic, and electromechanical components and systems for builders and users of mobile and industrial machinery and equipment. This segment sells its products to original equipment manufacturers (OEMs) and distributors who serve the replacement markets in manufacturing, packaging, processing, transportation, construction, refrigeration and air conditioning, agricultural, and military machinery and equipment industries. The Aerospace Systems segment offers products for use in commercial and military airframe and engine programs, such as control actuation systems and components, engine build-up ducting, engine exhaust nozzles and assemblies, engine systems and components, fluid conveyance systems and components, fuel systems and components, fuel tank inerting systems, hydraulic systems and components, lubrication components, avionics, sensors, pneumatic control components, thermal management products, fire detection and suppression systems and components, and wheels and brakes, as well as fluid metering, delivery, and atomization devices. This segment markets its products directly to OEMs and end users. The company markets its products through direct-sales employees, independent distributors, and sales representatives. Parker-Hannifin Corporation was founded in 1917 and is headquartered in Cleveland, Ohio.

About REV Group

REV Group, Inc., together with its subsidiaries, designs, manufactures, and distributes specialty vehicles, and related aftermarket parts and services in the United States, Canada, and internationally. It operates through three segments: Fire & Emergency, Commercial, and Recreation. The Fire & Emergency segment provides fire apparatus equipment under the Emergency One, Kovatch Mobile Equipment, Ferrara, Spartan Emergency Response, Smeal, Spartan Fire Chassis, and Ladder Tower brand names; and ambulances under the American Emergency Vehicles, Horton Emergency Vehicles, Leader Emergency Vehicles, Road Rescue, and Wheeled Coach brand names. The Commercial segment offers transit buses, type A school buses, sweepers, and terminal trucks under the Collins Bus, Eldorado National (California), Magellan, Capacity, and LayMor brand names. The Recreation segment offers motorized and towable RV models under the American Coach, Fleetwood RV, Holiday Rambler, Renegade RV, Midwest Automotive Designs, and Lance Camper brands; and produces a range of custom molded fiberglass products. The company sells its products to municipalities, government agencies, private contractors, consumers, and industrial and commercial end users through its direct sales force or dealer network. The company was formerly known as Allied Specialty Vehicles, Inc. and changed its name to REV Group, Inc. in November 2015. REV Group, Inc. was incorporated in 2008 and is based in Brookfield, Wisconsin.