Critical Contrast: REV Group (REVG) and Ford Motor (F)
REV Group (NYSE: REVG) and Ford Motor (NYSE:F) are both cyclical consumer goods & services companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.
Insider and Institutional Ownership
25.0% of REV Group shares are held by institutional investors. Comparatively, 53.8% of Ford Motor shares are held by institutional investors. 1.1% of Ford Motor 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.
This table compares REV Group and Ford Motor’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|REV Group||$1.93 billion||0.92||$30.19 million||$0.32||86.28|
|Ford Motor||$141.55 billion||0.35||$4.60 billion||$1.10||11.44|
Ford Motor has higher revenue and earnings than REV Group. Ford Motor is trading at a lower price-to-earnings ratio than REV Group, indicating that it is currently the more affordable of the two stocks.
This table compares REV Group and Ford Motor’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and recommmendations for REV Group and Ford Motor, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
REV Group presently has a consensus price target of $32.44, suggesting a potential upside of 17.51%. Ford Motor has a consensus price target of $12.38, suggesting a potential downside of 1.59%. Given REV Group’s stronger consensus rating and higher possible upside, equities research analysts clearly believe REV Group is more favorable than Ford Motor.
REV Group pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. Ford Motor pays an annual dividend of $0.60 per share and has a dividend yield of 4.8%. REV Group pays out 187.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ford Motor pays out 54.5% of its earnings in the form of a dividend. Ford Motor is clearly the better dividend stock, given its higher yield and lower payout ratio.
Ford Motor beats REV Group on 9 of the 14 factors compared between the two stocks.
REV Group Company Profile
REV Group, Inc. is a designer, manufacturer and distributor of specialty vehicles and related aftermarket parts and services. The Company operates through three segments: Fire & Emergency, Commercial and Recreation. The Company provides customized vehicle solutions for applications, including essential needs (ambulances, fire apparatus, school buses, mobility vans and municipal transit buses), industrial and commercial (terminal trucks, cut-away buses and street sweepers) and consumer leisure (recreational vehicles (RVs) and luxury buses). The Fire & Emergency segment manufactures a range of fire apparatus and ambulance products. The Commercial segment manufactures transit and shuttle buses, Type A school buses, mobility vans, and other specialty vehicles, including sweepers and terminal trucks distributed both through dealers and direct. The Recreation segment manufactures motorized RV products sold to brand-loyal, repeat customers who purchase through dealers.
Ford Motor Company Profile
Ford Motor Company is a global automotive and mobility company. The Company’s business includes designing, manufacturing, marketing, and servicing a full line of Ford cars, trucks, and sport utility vehicles (SUVs), as well as Lincoln luxury vehicles. The Company operates in four segments: Automotive, Financial Services, Ford Smart Mobility LLC, and Central Treasury Operations. The Automotive segment primarily includes the sale of Ford and Lincoln brand vehicles, service parts, and accessories across the world. The Financial Services segment primarily includes its vehicle-related financing and leasing activities at Ford Motor Credit Company LLC. Ford Smart Mobility LLC is a subsidiary formed to design, build, grow, and invest in emerging mobility services. The Central Treasury Operations segment is primarily engaged in decision making for investments, risk management activities, and providing financing for the Automotive segment.
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