Critical Comparison: Harley-Davidson (HOG) and Fox Factory (FOXF)

Harley-Davidson (NYSE: HOG) and Fox Factory (NASDAQ:FOXF) are both auto/tires/trucks companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.

Dividends

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Harley-Davidson pays an annual dividend of $1.48 per share and has a dividend yield of 3.5%. Fox Factory does not pay a dividend. Harley-Davidson pays out 42.3% of its earnings in the form of a dividend. Harley-Davidson has increased its dividend for 7 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations for Harley-Davidson and Fox Factory, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Harley-Davidson 1 12 6 0 2.26
Fox Factory 0 6 1 0 2.14

Harley-Davidson presently has a consensus target price of $50.71, indicating a potential upside of 20.16%. Fox Factory has a consensus target price of $39.80, indicating a potential upside of 13.07%. Given Harley-Davidson’s stronger consensus rating and higher possible upside, research analysts clearly believe Harley-Davidson is more favorable than Fox Factory.

Risk & Volatility

Harley-Davidson has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Fox Factory has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.

Insider & Institutional Ownership

95.9% of Harley-Davidson shares are held by institutional investors. Comparatively, 98.1% of Fox Factory shares are held by institutional investors. 0.6% of Harley-Davidson shares are held by insiders. Comparatively, 5.6% of Fox Factory shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Harley-Davidson and Fox Factory’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Harley-Davidson 10.62% 31.23% 5.92%
Fox Factory 9.07% 27.95% 16.20%

Earnings and Valuation

This table compares Harley-Davidson and Fox Factory’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Harley-Davidson $4.92 billion 1.45 $521.75 million $3.50 12.06
Fox Factory $475.63 million 2.79 $43.12 million $1.59 22.14

Harley-Davidson has higher revenue and earnings than Fox Factory. Harley-Davidson is trading at a lower price-to-earnings ratio than Fox Factory, indicating that it is currently the more affordable of the two stocks.

Summary

Harley-Davidson beats Fox Factory on 11 of the 17 factors compared between the two stocks.

About Harley-Davidson

Harley-Davidson, Inc. primarily manufactures and sells cruiser and touring motorcycles. The company operates in two segments, Motorcycles & Related Products, and Financial Services. The Motorcycles & Related Products segment designs, manufactures, and sells at wholesale on-road Harley-Davidson motorcycles, as well as motorcycle parts, accessories, general merchandise, and related services. It offers motorcycle parts and accessories, such as replacement parts, and mechanical and cosmetic accessories; and general merchandise, including MotorClothes apparel and riding gear, as well as licenses the Harley-Davidson name and other trademarks. This segment sells its products to retail customers through a network of independent dealers, as well as e-commerce channels in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia-Pacific. The Financial Services segment provides wholesale financing services, such as floorplan and open account financing of motorcycles, and motorcycle parts and accessories; and retail financing services, including installment lending for the purchase of new and used Harley-Davidson motorcycles, as well as point-of-sale protection products comprising motorcycle insurance, extended service contracts, and motorcycle maintenance protection. This segment also licenses the Harley-Davidson brand to third-party financial institutions. The company was founded in 1903 and is based in Milwaukee, Wisconsin.

About Fox Factory

Fox Factory Holding Corp. is engaged in the manufacturing, sale and service of ride dynamics products. The Company’s products fall into two categories: bikes, and powered vehicles, including side-by-sides, on-road vehicles with off-road capabilities, off-road vehicles and trucks, all-terrain vehicles (ATVs), snowmobiles, specialty vehicles and applications, and motorcycles. The Company’s brands include FOX, FOX RACING SHOX and RACE FACE. The Company’s products include 34 Factory Series FLOAT FIT4, which provides external adjustability with its fourth-generation FOX Isolated Technology and closed-cartridge damper, and includes a self-adjusting negative chamber air spring; X2 technology, utilized in its Factory Series FLOAT and DH rear shocks; PODIUM Internal Bypass, and X2 technology utilized in its 2.5 PODIUM shocks for side-by-sides that feature high and low speed rebound adjustment, high and low speed compression adjustment, and a dual-rate spring for the rear shocks.

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