American Railcar Industries (NASDAQ: ARII) and Greenbrier Companies, Inc. (The) (NYSE:GBX) are both small-cap transportation companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitabiliy, earnings, institutional ownership, risk and analyst recommendations.

Institutional & Insider Ownership

95.0% of American Railcar Industries shares are held by institutional investors. 0.0% of American Railcar Industries shares are held by company insiders. Comparatively, 4.6% of Greenbrier Companies, Inc. (The) shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares American Railcar Industries and Greenbrier Companies, Inc. (The)’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Railcar Industries $577.63 million 1.23 $164.64 million $3.13 11.89
Greenbrier Companies, Inc. (The) $2.15 billion 0.60 $345.21 million $3.97 11.31

Greenbrier Companies, Inc. (The) has higher revenue and earnings than American Railcar Industries. Greenbrier Companies, Inc. (The) is trading at a lower price-to-earnings ratio than American Railcar Industries, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares American Railcar Industries and Greenbrier Companies, Inc. (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Railcar Industries 10.46% 12.91% 4.89%
Greenbrier Companies, Inc. (The) 5.85% 11.74% 6.31%

Dividends

American Railcar Industries pays an annual dividend of $1.60 per share and has a dividend yield of 4.3%. Greenbrier Companies, Inc. (The) pays an annual dividend of $0.88 per share and has a dividend yield of 2.0%. American Railcar Industries pays out 51.1% of its earnings in the form of a dividend. Greenbrier Companies, Inc. (The) pays out 22.2% 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.

Analyst Ratings

This is a summary of current ratings and target prices for American Railcar Industries and Greenbrier Companies, Inc. (The), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Railcar Industries 0 2 1 0 2.33
Greenbrier Companies, Inc. (The) 2 3 4 0 2.22

American Railcar Industries presently has a consensus price target of $41.50, indicating a potential upside of 11.50%. Greenbrier Companies, Inc. (The) has a consensus price target of $47.14, indicating a potential upside of 5.00%. Given American Railcar Industries’ stronger consensus rating and higher probable upside, research analysts plainly believe American Railcar Industries is more favorable than Greenbrier Companies, Inc. (The).

Risk and Volatility

American Railcar Industries has a beta of 2.34, meaning that its share price is 134% more volatile than the S&P 500. Comparatively, Greenbrier Companies, Inc. (The) has a beta of 1.87, meaning that its share price is 87% more volatile than the S&P 500.

American Railcar Industries Company Profile

American Railcar Industries, Inc. is a designer and manufacturer of hopper and tank railcars. The Company designs and manufactures railcars and a range of components for the North American railcar and industrial markets. It operates through three segments: manufacturing, railcar leasing and railcar services. The Company’s Manufacturing segment consists of railcar manufacturing and railcar and industrial component manufacturing. The Railcar leasing segment consists of railcars manufactured by it and leased to third parties under operating leases. The Railcar services segment consists of railcar repair, engineering and field services. As of December 31, 2016, the Company’s operations included eight manufacturing plants that fabricate and assemble raw materials, mainly steel, into railcars, railcar components and industrial components; eight railcar repair plants; and 11 mobile repair (mobile units) and mini repair shop (mini shop) locations.

Greenbrier Companies, Inc. (The) Company Profile

The Greenbrier Companies, Inc. is a designer, manufacturer and marketer of railroad freight car equipment in North America and Europe; a manufacturer and marketer of marine barges in North America; a provider of wheel services, parts, leasing and other services to the railroad and related transportation industries in North America, and a provider of railcar repair, refurbishment and retrofitting services in North America through a joint venture partnership. It operates in four segments: Manufacturing; Wheels & Parts; Leasing & Services, and GBW Joint Venture. It also produces rail castings and tank heads through unconsolidated joint ventures. It operates an integrated business model in North America that combines freight car manufacturing, wheel services, repair, refurbishment, retrofitting, component parts, leasing and fleet management services. Its customers include railroads, leasing companies, financial institutions, shippers, carriers and transportation companies.

Receive News & Ratings for American Railcar Industries Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for American Railcar Industries Inc. and related companies with MarketBeat.com's FREE daily email newsletter.