Trinity Industries (NYSE: TRN) and Raven Industries (NASDAQ:RAVN) are both transportation companies, but which is the superior business? We will compare the two businesses based on the strength of their profitabiliy, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Trinity Industries and Raven Industries, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trinity Industries 1 2 3 0 2.33
Raven Industries 0 1 1 0 2.50

Trinity Industries presently has a consensus target price of $25.50, suggesting a potential downside of 5.42%. Raven Industries has a consensus target price of $23.00, suggesting a potential downside of 32.65%. Given Trinity Industries’ higher probable upside, research analysts clearly believe Trinity Industries is more favorable than Raven Industries.

Institutional and Insider Ownership

80.6% of Trinity Industries shares are owned by institutional investors. Comparatively, 73.5% of Raven Industries shares are owned by institutional investors. 2.0% of Trinity Industries shares are owned by company insiders. Comparatively, 1.8% of Raven Industries shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Trinity Industries pays an annual dividend of $0.52 per share and has a dividend yield of 1.9%. Raven Industries pays an annual dividend of $0.52 per share and has a dividend yield of 1.5%. Trinity Industries pays out 32.1% of its earnings in the form of a dividend. Raven Industries pays out 70.3% 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. Raven Industries has increased its dividend for 6 consecutive years. Trinity Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Trinity Industries and Raven Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Trinity Industries 6.20% 5.75% 2.71%
Raven Industries 8.85% 10.32% 8.89%

Volatility & Risk

Trinity Industries has a beta of 2.19, meaning that its share price is 119% more volatile than the S&P 500. Comparatively, Raven Industries has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.

Valuation and Earnings

This table compares Trinity Industries and Raven Industries’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Trinity Industries $4.28 billion 0.96 $925.00 million $1.62 16.64
Raven Industries $302.57 million 4.08 $56.53 million $0.74 46.15

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

Summary

Trinity Industries beats Raven Industries on 10 of the 17 factors compared between the two stocks.

Trinity Industries Company Profile

Trinity Industries, Inc. is a diversified industrial company that owns businesses providing products and services to the energy, chemical, agriculture, transportation and construction sectors. The Company’s products and services include railcars and railcar parts; parts and steel components; the leasing, management and maintenance of railcars; highway products; construction aggregates; inland barges; structural wind towers; steel utility structures; storage and distribution containers, and trench shields and shoring products. The Company’s segments include the Rail Group, Construction Products Group, Inland Barge Group, Energy Equipment Group, Railcar Leasing and Management Services Group, and All Other. Its All Other segment includes its captive insurance and transportation companies, and other peripheral businesses. It manufactures a line of railcars, including autorack cars, box cars, covered hopper cars, gondola cars, intermodal cars, open hopper cars and tank cars.

Raven Industries Company Profile

Raven Industries, Inc. is a diversified technology company providing a range of products to customers within the industrial, agricultural, energy, construction and defense markets. The Company operates through three segments: Applied Technology Division (Applied Technology), Engineered Films Division (Engineered Films) and Aerostar Division (Aerostar). The Applied Technology segment designs, manufactures, sells and services precision agriculture products and information management tools for growers. The Engineered Films segment produces plastic films and sheeting for energy, agricultural, construction, geomembrane and industrial applications. The Aerostar segment designs and manufactures products, including balloons, tethered aerostats and radar processing systems. It conducts business through its subsidiaries, including Aerostar International, Inc. (Aerostar), Vista Research, Inc. (Vista), Raven International Holding Company BV (Raven Holdings) and Raven Industries Canada, Inc.

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