Head-To-Head Analysis: Wabash National (NYSE:WNC) & Donaldson (NYSE:DCI)

Donaldson (NYSE:DCI) and Wabash National (NYSE:WNC) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.

Dividends

Donaldson pays an annual dividend of $1.28 per share and has a dividend yield of 1.5%. Wabash National pays an annual dividend of $0.32 per share and has a dividend yield of 2.4%. Donaldson pays out 33.2% of its earnings in the form of a dividend. Wabash National pays out -16.6% 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. Donaldson has raised its dividend for 38 consecutive years. Wabash National is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Donaldson and Wabash National, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Donaldson	0	2	3	0	2.60
Wabash National	1	1	2	0	2.25

Donaldson presently has a consensus target price of $101.67, indicating a potential upside of 16.80%. Wabash National has a consensus target price of $21.67, indicating a potential upside of 63.76%. Given Wabash National’s higher possible upside, analysts clearly believe Wabash National is more favorable than Donaldson.

Insider and Institutional Ownership

82.8% of Donaldson shares are owned by institutional investors. Comparatively, 97.0% of Wabash National shares are owned by institutional investors. 2.2% of Donaldson shares are owned by insiders. Comparatively, 2.8% of Wabash National shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Donaldson and Wabash National”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Donaldson	$3.89 billion	2.59	$453.80 million	$3.85	22.61
Wabash National	$1.54 billion	0.35	$211.45 million	($1.93)	-6.86

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

Volatility and Risk

Donaldson has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Wabash National has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.

Profitability

This table compares Donaldson and Wabash National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Donaldson	11.68%	28.68%	14.27%
Wabash National	-5.48%	-36.59%	-10.27%

Summary

Donaldson beats Wabash National on 11 of the 17 factors compared between the two stocks.

About Donaldson

Donaldson Company, Inc. manufactures and sells filtration systems and replacement parts worldwide. The company operates through three segments: Mobile Solutions, Industrial Solutions, and Life Sciences. Its Mobile Solutions segment provides replacement filters for air and liquid filtration applications, such as air filtration systems; liquid filtration systems for fuel, lube, and hydraulic applications; exhaust and emissions systems and sensors; indicators; and monitoring systems. This segment sells its products to original equipment manufacturers (OEMs) in the construction, mining, agriculture, aerospace, defense, and transportation markets; and to independent distributors, and OEM dealer networks. The company's Industrial Solutions segment offers dust, fume, and mist collectors; compressed air and industrial gasses purification systems; and hydraulic and lubricated rotating equipment applications, as well as gas and liquid filtration for industrial processes. This segment sells its products to various distributors, OEMs, and end-users. Its Life Sciences segment provides micro-environment gas and liquid filtration for food, beverage, and industrial processes; bioprocessing equipment, that includes bioreactors and fermenters; and bioprocessing consumables, such as chromatography devices, reagents and filters, and polytetrafluoroethylene membrane-based products, as well as specialized air and gas filtration systems for applications, including hard disk drives, semi-conductor manufacturing and sensors, battery systems, and powertrain components to OEMs and various end-users. The company was founded in 1915 and is headquartered in Bloomington, Minnesota.

About Wabash National

Wabash National Corporation provides connected solutions for the transportation, logistics, and distribution industries primarily in the United States. The company operates through two segments, Transportation Solutions and Parts & Services. The Transportation Solutions segment designs and manufactures transportation-related equipment and products dry and refrigerated van trailers, platform trailers, tank trailers, and truck-mounted tanks; truck bodies for dry-freight transportation; cargo and cargo XL bodies for commercial applications; refrigerated truck bodies; platform truck bodies; and used trailers, as well as laminated hardwood oak flooring products. The Parts & Services segment provides aftermarket parts and services; steel flatbed bodies, truck body mounting, shelving for package delivery, partitions, roof racks, hitches, liftgates, thermal solutions, and others; truck body repair parts; and door repair and replacement, collision repair, and basic maintenance services. It also develops and scales a digital marketplace for the transportation and logistics distribution industry; operates a parts and services distribution platform; and stainless steel storage tanks and silos, mixers, and processors for the dairy, food and beverage, pharmaceutical, chemical, craft brewing, and biotech markets; trailers as a service; and composite products, including truck bodies, overhead doors, and other industrial application products, as well as used trailers. The company offers its products under the Wabash, DuraPlate, DuraPlateHD, DuraPlate AeroSkirt, and AeroSkirt CX brands, as well as EcoNex brand. It serves its products to truckload common carriers, leasing companies, private fleet carriers, less-than-truckload common carriers, and package carriers. Wabash National Corporation was founded in 1985 and is headquartered in Lafayette, Indiana.