AB Volvo (OTCMKTS:VLVLY) versus Modine Manufacturing (NYSE:MOD) Critical Review

AB Volvo (OTCMKTS:VLVLY) and Modine Manufacturing (NYSE:MOD) are both large-cap auto/tires/trucks companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Valuation and Earnings

This table compares AB Volvo and Modine Manufacturing”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AB Volvo	$48.98 billion	1.38	$3.52 billion	$2.04	16.24
Modine Manufacturing	$2.58 billion	4.47	$184.00 million	$1.80	121.73

AB Volvo has higher revenue and earnings than Modine Manufacturing. AB Volvo is trading at a lower price-to-earnings ratio than Modine Manufacturing, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares AB Volvo and Modine Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AB Volvo	8.47%	23.01%	6.14%
Modine Manufacturing	3.40%	22.99%	10.52%

Institutional & Insider Ownership

0.0% of AB Volvo shares are held by institutional investors. Comparatively, 95.2% of Modine Manufacturing shares are held by institutional investors. 2.5% of Modine Manufacturing shares are held by company 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.

Analyst Recommendations

This is a summary of current ratings and price targets for AB Volvo and Modine Manufacturing, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AB Volvo	1	6	0	2	2.33
Modine Manufacturing	0	1	6	1	3.00

Modine Manufacturing has a consensus price target of $234.33, indicating a potential upside of 6.95%. Given Modine Manufacturing’s stronger consensus rating and higher possible upside, analysts clearly believe Modine Manufacturing is more favorable than AB Volvo.

Volatility and Risk

AB Volvo has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500. Comparatively, Modine Manufacturing has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500.

Summary

Modine Manufacturing beats AB Volvo on 9 of the 15 factors compared between the two stocks.

About AB Volvo

AB Volvo (publ), together with its subsidiaries, manufactures and sells trucks, buses, construction equipment, and marine and industrial engines in Europe, the United States, Asia, Africa, and Oceania. The company provides heavy-duty trucks for long-haulage and construction work and light-duty trucks for distribution purposes under the Volvo, Renault Trucks, Mack, Eicher, and Dongfeng Trucks brands; and city and intercity buses, coaches, and chassis under the Prevost and Volvo Bus brands. It offers road construction machine, haulers, wheel loaders, excavators, and compact equipment. In addition, the company offers engines and power solutions for leisure and commercial vessels, as well as for power generation, industrial, and off-highway applications under the Volvo Penta brand name. Further, it provides financing, insurance, rental, spare parts, repairs, preventive maintenance, service agreement, and assistance services. The company offers its products and services through a network of dealerships and workshops. It has a strategic alliance with Isuzu Motors within commercial vehicles; a partnership with Samsung SDI Co to develop batteries for its electric products; and an agreement with Aurora to develop autonomous trucks. AB Volvo (publ) was incorporated in 1915 and is headquartered in Gothenburg, Sweden.

About Modine Manufacturing

Modine Manufacturing Company provides thermal management products and solutions in the United States, Italy, Hungary, China, the United Kingdom, and internationally. It operates through Climate Solutions and Performance Technologies segments. The company offers heat transfer coils, including heat recovery and round tube plate fin coils; gas-fired, hydronic, electric and oilfired unit heaters; roof-mounted direct- and indirect-fired makeup air units; duct furnaces; infrared units; perimeter heating products; single packaged unit ventilators; modular chillers; air handler and condensing units; ceiling cassettes; evaporator unit coolers, remote condensers, fluid coolers, gas coolers, and dry and brine coolers; and motor and generator cooling coils, transformer oil coolers, radiators, dryers, and industrial heat exchangers. It also provides data center products consisting of IT cooling solutions, including precision air conditioning units for data center applications; computer room air conditioning and handler units; hybrid fan coils; fan walls; chillers; condensers; condensing units; and liquid cooling solutions for high-density computing, as well as replacement parts, maintenance service and control solutions for existing equipment and new building management controls and systems. In addition, the company offers powertrain cooling products, such as radiators, condensers, engine cooling modules, charge air coolers, fan shrouds, and surge tanks; cooling module generator sets; aluminum and stainless steel engine oil coolers, exhaust gas recirculation coolers, liquid charge air coolers, transmission and retarder oil coolers, and chillers; battery thermal management systems, electronics cooling packages, battery chillers, battery cooling plates, coolers and casings for electronics cooling, and coolers for electric axles; and coatings products and application services. Modine Manufacturing Company was incorporated in 1916 and is headquartered in Racine, Wisconsin.