Hyster-Yale Materials Handling (NYSE: HY) and Wabash National Corporation (NYSE:WNC) are both small-cap industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitabiliy.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Hyster-Yale Materials Handling and Wabash National Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hyster-Yale Materials Handling 0 2 1 0 2.33
Wabash National Corporation 0 4 1 0 2.20

Hyster-Yale Materials Handling presently has a consensus price target of $74.00, suggesting a potential downside of 2.75%. Wabash National Corporation has a consensus price target of $18.40, suggesting a potential downside of 13.25%. Given Hyster-Yale Materials Handling’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Hyster-Yale Materials Handling is more favorable than Wabash National Corporation.

Earnings & Valuation

This table compares Hyster-Yale Materials Handling and Wabash National Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hyster-Yale Materials Handling $2.68 billion 0.47 $100.10 million $3.10 24.55
Wabash National Corporation $1.76 billion 0.72 $221.58 million $1.72 12.33

Wabash National Corporation has higher revenue, but lower earnings than Hyster-Yale Materials Handling. Wabash National Corporation is trading at a lower price-to-earnings ratio than Hyster-Yale Materials Handling, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Hyster-Yale Materials Handling and Wabash National Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hyster-Yale Materials Handling 1.90% 10.53% 4.03%
Wabash National Corporation 6.37% 23.44% 11.84%

Insider & Institutional Ownership

68.0% of Hyster-Yale Materials Handling shares are held by institutional investors. 26.3% of Hyster-Yale Materials Handling shares are held by company insiders. Comparatively, 2.9% of Wabash National Corporation 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.

Volatility & Risk

Hyster-Yale Materials Handling has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, Wabash National Corporation has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500.

Dividends

Hyster-Yale Materials Handling pays an annual dividend of $1.21 per share and has a dividend yield of 1.6%. Wabash National Corporation pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Hyster-Yale Materials Handling pays out 39.0% of its earnings in the form of a dividend. Wabash National Corporation pays out 14.0% 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. Wabash National Corporation has raised its dividend for 4 consecutive years.

About Hyster-Yale Materials Handling

Hyster-Yale Materials Handling, Inc. is a lift truck manufacturer. The Company designs, engineers, manufactures, sells and services a line of lift trucks, attachments and aftermarket parts marketed globally under the Hyster and Yale brand names, mainly to independent Hyster and Yale retail dealerships. The Company operates through five segments: the Americas, EMEA, JAPIC, Bolzoni and Nuvera. The Company offers a range of solutions, including attachments and hydrogen fuel cell power products, telematics, automation and fleet management services, as well as an array of other power options for its lift trucks. The Company’s segments for the lift truck business include three management units: the Americas, EMEA and JAPIC. Americas includes operations in the United States, Canada, Mexico, Brazil, Latin America and its corporate headquarters. EMEA includes operations in Europe, the Middle East and Africa. JAPIC includes operations in the Asia and Pacific regions including China.

About Wabash National Corporation

Wabash National Corporation is a diversified industrial manufacturer and producer of semi-trailers and liquid transportation systems. The Company’s segments include Commercial Trailer Products; Diversified Products, and Corporate and Eliminations segment. The Company designs, manufactures and markets a range of products, including dry freight and refrigerated trailers, platform trailers, bulk tank trailers, dry and refrigerated truck bodies, truck-mounted tanks, intermodal equipment, aircraft refueling equipment, structural composite panels and products, trailer aerodynamic solutions, and specialty food grade and pharmaceutical equipment. The Company’s Commercial Trailer Products segment manufactures standard and customized van and platform trailers, truck bodies and other transportation related equipment. The Company’s Diversified Products segment consists of business units, including Tank Trailer; Aviation & Truck Equipment; Process Systems, and Composites.

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