REV Group (NYSE: REVG) and General Motors (NYSE:GM) are both cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitability.

Analyst Ratings

This is a breakdown of current recommendations for REV Group and General Motors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
REV Group 0 3 8 0 2.73
General Motors 3 12 7 1 2.26

REV Group presently has a consensus target price of $32.44, indicating a potential upside of 17.51%. General Motors has a consensus target price of $43.38, indicating a potential upside of 1.38%. Given REV Group’s stronger consensus rating and higher probable upside, equities research analysts plainly believe REV Group is more favorable than General Motors.

Earnings and Valuation

This table compares REV Group and General Motors’ top-line revenue, earnings per share 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
General Motors $166.38 billion 0.37 $9.43 billion $1.95 21.94

General Motors has higher revenue and earnings than REV Group. General Motors is trading at a lower price-to-earnings ratio than REV Group, indicating that it is currently the more affordable of the two stocks.

Dividends

REV Group pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. General Motors pays an annual dividend of $1.52 per share and has a dividend yield of 3.6%. 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. General Motors pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. REV Group has raised its dividend for 2 consecutive years. General Motors is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

25.0% of REV Group shares are owned by institutional investors. Comparatively, 73.0% of General Motors shares are owned by institutional investors. 0.0% of General Motors shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares REV Group and General Motors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
REV Group 0.98% 10.51% 3.95%
General Motors 2.00% 20.95% 4.08%

Summary

General Motors beats REV Group on 11 of the 16 factors compared between the two stocks.

About REV Group

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.

About General Motors

General Motors Company designs, builds and sells cars, trucks, crossovers and automobile parts. The Company’s segments include GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO), GM South America (GMSA) and General Motors Financial Company, Inc. (GM Financial). The Company provides automotive financing services through General Motors Financial Company, Inc. The Company develops, manufactures and/or markets vehicles in North America under the brands, including Buick, Cadillac, Chevrolet and GMC. The Company also develops, manufactures and/or markets vehicles outside North America under the brands, including Buick, Cadillac, Chevrolet, GMC, Holden, Opel and Vauxhall. The Company offers a range of after-sale vehicle services and products through the dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories and extended service warranties. GM Financial is an automotive finance company, which provides automobile finance solutions.

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