Winnebago Industries (NYSE: WGO) and LCI Industries (NYSE:LCII) are both construction companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Winnebago Industries and LCI Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Winnebago Industries 4.61% 21.92% 10.18%
LCI Industries 7.07% 23.60% 16.10%

Institutional & Insider Ownership

83.0% of Winnebago Industries shares are owned by institutional investors. Comparatively, 99.6% of LCI Industries shares are owned by institutional investors. 3.4% of Winnebago Industries shares are owned by company insiders. Comparatively, 3.6% of LCI Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Winnebago Industries and LCI Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Winnebago Industries $1.55 billion 1.11 $71.33 million $2.30 23.48
LCI Industries $1.68 billion 1.93 $129.67 million $5.61 23.16

LCI Industries has higher revenue and earnings than Winnebago Industries. LCI Industries is trading at a lower price-to-earnings ratio than Winnebago Industries, indicating that it is currently the more affordable of the two stocks.

Dividends

Winnebago Industries pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. LCI Industries pays an annual dividend of $2.20 per share and has a dividend yield of 1.7%. Winnebago Industries pays out 17.4% of its earnings in the form of a dividend. LCI Industries pays out 39.2% 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. Winnebago Industries has raised its dividend for 2 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Winnebago Industries and LCI Industries, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Winnebago Industries 0 3 4 0 2.57
LCI Industries 1 0 3 0 2.50

Winnebago Industries currently has a consensus price target of $44.80, suggesting a potential downside of 17.04%. LCI Industries has a consensus price target of $123.00, suggesting a potential downside of 5.35%. Given LCI Industries’ higher probable upside, analysts plainly believe LCI Industries is more favorable than Winnebago Industries.

Volatility and Risk

Winnebago Industries has a beta of 2.06, suggesting that its stock price is 106% more volatile than the S&P 500. Comparatively, LCI Industries has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500.

Summary

LCI Industries beats Winnebago Industries on 12 of the 17 factors compared between the two stocks.

About Winnebago Industries

Winnebago Industries, Inc. is a manufacturer of recreation vehicles (RVs) used primarily in leisure travel and outdoor recreation activities. The Company designs, develops, manufactures and markets motorized and towable recreation products along with supporting products and services. Its other products manufactured by the Company consist of original equipment manufacturer (OEM) parts, including extruded aluminum and other component products for other manufacturers and commercial vehicles. The Company offers products under categories, which include motorhomes, towables and other manufactured products. The Company produces all of its motorhomes in vertically integrated manufacturing facilities in Iowa and it produces all travel trailer and fifth wheel trailers in Indiana. The Company operates under the brand, Winnebago. The Company distributes its products primarily through independent dealers throughout the United States and Canada, who then retail the products to the end consumer.

About LCI Industries

LCI Industries, formerly Drew Industries Incorporated, through its subsidiary, Lippert Components, Inc. and its subsidiaries (LCI), supplies an array of components for the original equipment manufacturers (OEMs) of recreational vehicles (RVs) and adjacent industries. The Company’s segments include OEM Segment and Aftermarket Segment. The OEM Segment manufactures or distributes an array of components for the OEMs of RVs and adjacent industries, including buses; trailers used to haul boats, livestock, equipment and other cargo; pontoon boats; manufactured homes; modular housing, and mobile office units. The Aftermarket Segment supplies components to the related aftermarket channels of the RV and adjacent industries, primarily to retail dealers, wholesale distributors and service centers. The Aftermarket Segment also includes the sale of replacement glass and awnings to fulfill insurance claims.

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