Douglas Dynamics (NYSE: PLOW) and Wabco Holdings (NYSE:WBC) are both auto/tires/trucks companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitabiliy, valuation and analyst recommendations.

Risk and Volatility

Douglas Dynamics has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, Wabco Holdings has a beta of 1.64, meaning that its share price is 64% more volatile than the S&P 500.

Profitability

This table compares Douglas Dynamics and Wabco Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Douglas Dynamics 6.83% 15.78% 5.33%
Wabco Holdings 11.23% 40.21% 10.86%

Insider & Institutional Ownership

85.7% of Douglas Dynamics shares are held by institutional investors. Comparatively, 98.6% of Wabco Holdings shares are held by institutional investors. 3.2% of Douglas Dynamics shares are held by company insiders. Comparatively, 0.8% of Wabco Holdings shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Douglas Dynamics and Wabco Holdings’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Douglas Dynamics $439.73 million 1.60 $88.60 million $1.33 23.46
Wabco Holdings $2.93 billion 2.50 $479.40 million $6.00 22.80

Wabco Holdings has higher revenue and earnings than Douglas Dynamics. Wabco Holdings is trading at a lower price-to-earnings ratio than Douglas Dynamics, indicating that it is currently the more affordable of the two stocks.

Dividends

Douglas Dynamics pays an annual dividend of $0.96 per share and has a dividend yield of 3.1%. Wabco Holdings does not pay a dividend. Douglas Dynamics pays out 72.2% of its earnings in the form of a dividend. Douglas Dynamics has raised its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations for Douglas Dynamics and Wabco Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Douglas Dynamics 0 0 2 0 3.00
Wabco Holdings 1 3 7 0 2.55

Douglas Dynamics currently has a consensus price target of $42.00, suggesting a potential upside of 34.62%. Wabco Holdings has a consensus price target of $133.67, suggesting a potential downside of 2.28%. Given Douglas Dynamics’ stronger consensus rating and higher possible upside, research analysts clearly believe Douglas Dynamics is more favorable than Wabco Holdings.

Summary

Wabco Holdings beats Douglas Dynamics on 11 of the 17 factors compared between the two stocks.

About Douglas Dynamics

Douglas Dynamics, Inc. is a manufacturer and up-fitter of commercial vehicle attachments and equipment. The Company’s portfolio includes snow and ice management attachments sold under the BLIZZARD, FISHER, HENDERSON, SNOWEX and WESTERN brands, turf care equipment under the TURFEX brand and industrial maintenance equipment under the SWEEPEX brand. The Company operates through two segments: Work Truck Attachments and Work Truck Solutions. The Work Truck Attachments segment includes snow and ice management attachments sold under the FISHER, WESTERN, HENDERSON and SNOWEX brands. The Work Truck Solutions segment includes the up-fit of attachments and storage solutions for commercial work vehicles under the DEJANA brand and its related sub-brands. In its Work Truck Attachments segment, the Company offers a product line of snowplows, and sand and salt spreaders for light and heavy duty trucks. Its Work Truck Solutions products consist of truck and vehicle up-fits.

About Wabco Holdings

WABCO Holdings Inc. is a supplier of electronic, mechanical, electro-mechanical and aerodynamic products for various manufacturers of commercial trucks, buses and trailers, as well as passenger cars. The Company engineers, develops, manufactures and sells braking, stability, suspension and transmission automation and air management systems primarily for commercial vehicles. Its products are pneumatic anti-lock braking systems, electronic braking systems, electronic stability control systems, brake controls, automated manual transmission systems, air disc brakes, and a range of conventional mechanical products, such as actuators, air compressors and air control valves for medium- and heavy-duty trucks, buses and trailers. The Company’s products also include air compressor and air processing/air management system; electronic and conventional air suspension systems; transmission automation; roll stability support; advanced driver assistance systems, and fleet management solutions.

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