Atmus Filtration Technologies (NYSE:ATMU) & REV Group (NYSE:REVG) Critical Review

REV Group (NYSE:REVG) and Atmus Filtration Technologies (NYSE:ATMU) are both mid-cap industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, institutional ownership, risk, analyst recommendations and profitability.

Insider & Institutional Ownership

32.7% of Atmus Filtration Technologies shares are held by institutional investors. 1.7% of REV Group shares are held by insiders. Comparatively, 0.4% of Atmus Filtration Technologies shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares REV Group and Atmus Filtration Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
REV Group	3.86%	31.67%	10.30%
Atmus Filtration Technologies	11.32%	59.85%	14.66%

Dividends

REV Group pays an annual dividend of $0.24 per share and has a dividend yield of 0.4%. Atmus Filtration Technologies pays an annual dividend of $0.24 per share and has a dividend yield of 0.6%. REV Group pays out 12.6% of its earnings in the form of a dividend. Atmus Filtration Technologies pays out 9.2% 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. REV Group has increased its dividend for 1 consecutive years. Atmus Filtration Technologies is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

REV Group has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Atmus Filtration Technologies has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for REV Group and Atmus Filtration Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
REV Group	0	2	1	1	2.75
Atmus Filtration Technologies	0	2	4	0	2.67

REV Group currently has a consensus price target of $55.67, suggesting a potential downside of 12.88%. Atmus Filtration Technologies has a consensus price target of $57.67, suggesting a potential upside of 33.98%. Given Atmus Filtration Technologies’ higher probable upside, analysts plainly believe Atmus Filtration Technologies is more favorable than REV Group.

Earnings & Valuation

This table compares REV Group and Atmus Filtration Technologies”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
REV Group	$2.46 billion	1.27	$95.20 million	$1.91	33.46
Atmus Filtration Technologies	$1.90 billion	1.85	$207.40 million	$2.61	16.49

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

Summary

Atmus Filtration Technologies beats REV Group on 12 of the 18 factors compared between the two stocks.

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.

About Atmus Filtration Technologies

Atmus Filtration Technologies Inc. designs, manufactures, and sells filtration products under the Fleetguard brand name in North America, Europe, South America, Asia, Australia, Africa, and internationally. The company offers fuel filters, lube filters, air filters, crankcase ventilation, hydraulic filters, coolants, and fuel additives, as well as other chemicals; and fuel water separators and other filtration systems to original equipment manufacturers, dealers/distributors, and end-users. Its products are used in on-highway commercial vehicles and off-highway agriculture, construction, mining, and power generation vehicles and equipment. The company was founded in 1958 and is headquartered in Nashville, Tennessee.