CNH Industrial (NYSE: CNHI) and WABCO (NYSE:WBC) are both mid-cap auto/tires/trucks companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, profitability and earnings.

Profitability

This table compares CNH Industrial and WABCO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CNH Industrial 1.66% 14.63% 1.41%
WABCO 9.75% 38.93% 10.53%

Analyst Ratings

This is a breakdown of current ratings and price targets for CNH Industrial and WABCO, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CNH Industrial 1 2 5 0 2.50
WABCO 0 4 11 0 2.73

CNH Industrial currently has a consensus target price of $12.43, indicating a potential downside of 4.51%. WABCO has a consensus target price of $159.36, indicating a potential upside of 13.53%. Given WABCO’s stronger consensus rating and higher possible upside, analysts plainly believe WABCO is more favorable than CNH Industrial.

Institutional & Insider Ownership

18.2% of CNH Industrial shares are owned by institutional investors. Comparatively, 95.3% of WABCO shares are owned by institutional investors. 0.8% of WABCO shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

CNH Industrial has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, WABCO has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500.

Dividends

CNH Industrial pays an annual dividend of $0.12 per share and has a dividend yield of 0.9%. WABCO does not pay a dividend. CNH Industrial pays out 37.5% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares CNH Industrial and WABCO’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CNH Industrial $24.87 billion 0.71 -$252.00 million $0.32 40.69
WABCO $2.81 billion 2.68 $223.00 million $5.54 25.34

WABCO has lower revenue, but higher earnings than CNH Industrial. WABCO is trading at a lower price-to-earnings ratio than CNH Industrial, indicating that it is currently the more affordable of the two stocks.

Summary

WABCO beats CNH Industrial on 13 of the 16 factors compared between the two stocks.

About CNH Industrial

CNH Industrial N.V. is a capital goods company. The Company is engaged in the design, production, marketing, sale and financing of agricultural and construction equipment, trucks, commercial vehicles, buses and specialty vehicles for firefighting, defense and other uses, as well as engines, transmissions and axles for vehicles and engines under marine and power generation applications. Its segments include Agricultural Equipment, which designs, manufactures and distributes farm machinery and implements; Construction Equipment, which designs, manufactures and distributes construction equipment; Commercial Vehicles, which designs, produces and sells a range of light, medium and heavy vehicles for the transportation and distribution of goods; Powertrain, which designs, manufactures and offers a range of propulsion and transmission systems, and axles for on- and off-road applications, and Financial Services, which offers a range of financial services to dealers and customers.

About WABCO

WABCO Holdings Inc. is a supplier of electronic, mechanical, electro-mechanical and aerodynamic products for various manufacturers of commercial trucks, buses and trailers, as well as passenger cars. The Company engineers, develops, manufactures and sells braking, stability, suspension and transmission automation and air management systems primarily for commercial vehicles. Its products are pneumatic anti-lock braking systems, electronic braking systems, electronic stability control systems, brake controls, automated manual transmission systems, air disc brakes, and a range of conventional mechanical products, such as actuators, air compressors and air control valves for medium- and heavy-duty trucks, buses and trailers. The Company’s products also include air compressor and air processing/air management system; electronic and conventional air suspension systems; transmission automation; roll stability support; advanced driver assistance systems, and fleet management solutions.

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