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

Profitability

This table compares Hyster-Yale Materials Handling and Douglas Dynamics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hyster-Yale Materials Handling 2.17% 11.73% 4.33%
Douglas Dynamics 6.16% 14.96% 4.82%

Volatility and Risk

Hyster-Yale Materials Handling has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500. Comparatively, Douglas Dynamics has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.

Insider and Institutional Ownership

51.5% of Hyster-Yale Materials Handling shares are held by institutional investors. Comparatively, 89.3% of Douglas Dynamics shares are held by institutional investors. 26.3% of Hyster-Yale Materials Handling shares are held by insiders. Comparatively, 3.2% of Douglas Dynamics shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Hyster-Yale Materials Handling and Douglas Dynamics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hyster-Yale Materials Handling 0 2 1 0 2.33
Douglas Dynamics 0 0 2 0 3.00

Hyster-Yale Materials Handling currently has a consensus target price of $74.00, suggesting a potential downside of 9.36%. Douglas Dynamics has a consensus target price of $42.00, suggesting a potential upside of 0.36%. Given Douglas Dynamics’ stronger consensus rating and higher possible upside, analysts plainly believe Douglas Dynamics is more favorable than Hyster-Yale Materials Handling.

Dividends

Hyster-Yale Materials Handling pays an annual dividend of $1.21 per share and has a dividend yield of 1.5%. Douglas Dynamics pays an annual dividend of $0.96 per share and has a dividend yield of 2.3%. Hyster-Yale Materials Handling pays out 33.8% of its earnings in the form of a dividend. Douglas Dynamics pays out 76.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hyster-Yale Materials Handling has increased its dividend for 4 consecutive years and Douglas Dynamics has increased its dividend for 4 consecutive years.

Earnings & Valuation

This table compares Hyster-Yale Materials Handling and Douglas Dynamics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hyster-Yale Materials Handling $2.72 billion 0.38 $101.90 million $3.58 22.80
Douglas Dynamics $465.33 million 2.03 $86.94 million $1.26 33.21

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

Summary

Douglas Dynamics beats Hyster-Yale Materials Handling on 11 of the 16 factors compared between the two stocks.

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 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.

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