Ferguson (NYSE:FERG) & Rush Enterprises (NASDAQ:RUSHA) Critical Comparison

Ferguson (NYSE:FERG) and Rush Enterprises (NASDAQ:RUSHA) are both industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, analyst recommendations, valuation and profitability.

Volatility & Risk

Ferguson has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, Rush Enterprises has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Ferguson and Rush Enterprises, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferguson	0	5	11	1	2.76
Rush Enterprises	0	2	3	0	2.60

Ferguson currently has a consensus target price of $277.21, indicating a potential upside of 7.83%. Rush Enterprises has a consensus target price of $87.00, indicating a potential upside of 8.64%. Given Rush Enterprises’ higher possible upside, analysts clearly believe Rush Enterprises is more favorable than Ferguson.

Dividends

Ferguson pays an annual dividend of $3.56 per share and has a dividend yield of 1.4%. Rush Enterprises pays an annual dividend of $0.56 per share and has a dividend yield of 0.7%. Ferguson pays out 41.4% of its earnings in the form of a dividend. Rush Enterprises pays out 16.9% 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. Rush Enterprises has increased its dividend for 6 consecutive years.

Earnings & Valuation

This table compares Ferguson and Rush Enterprises”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferguson	$31.32 billion	1.59	$1.86 billion	$8.60	29.89
Rush Enterprises	$7.24 billion	0.86	$263.78 million	$3.32	24.12

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

Profitability

This table compares Ferguson and Rush Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ferguson	6.98%	38.81%	12.83%
Rush Enterprises	3.67%	11.65%	5.84%

Institutional & Insider Ownership

82.0% of Ferguson shares are held by institutional investors. Comparatively, 84.4% of Rush Enterprises shares are held by institutional investors. 0.2% of Ferguson shares are held by company insiders. Comparatively, 12.7% of Rush Enterprises shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Ferguson beats Rush Enterprises on 13 of the 18 factors compared between the two stocks.

About Ferguson

Ferguson Enterprises Inc. distributes plumbing and heating products in North America. The company provides expertise, solutions, and products, including infrastructure, plumbing, appliances, fire, and fabrication, as well as heating, ventilation, and air conditioning (HVAC) to residential and non-residential customers. It also supplies specialist water and wastewater treatment products to residential, commercial, and infrastructure contractors, as well as supplies pipe, valves, and fittings solutions to industrial customers. In addition, it offers customized solutions, such as virtual design, fabrication, valve actuation, pre-assembly, kitting, installation, and project management services, as well as after-sales support that comprises warranty, credit, project-based billing, returns and maintenance, and repair and operations support. The company sells its products through a network of distribution centers, branches, counter service and specialist sales associates, showroom consultants, and e-commerce channels. Ferguson Enterprises Inc. was founded in 1953 and is headquartered in Newport News, Virginia.

About Rush Enterprises

Rush Enterprises, Inc., through its subsidiaries, operates as an integrated retailer of commercial vehicles and related services in the United States and Canada. The company operates a network of commercial vehicle dealerships under the Rush Truck Centers name. Its Rush Truck Centers primarily sell commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, IC Bus, Blue Bird, and Dennis Eagle. The company also offers new and used commercial vehicles, and aftermarket parts, as well as service and repair, financing, and leasing and rental services; and offers property and casualty insurance, including collision and liability insurance on commercial vehicles, cargo insurance, and credit life insurance products. In addition, it provides equipment installation and repair, parts installation, and paint and body repair services; new vehicle pre-delivery inspection, truck modification, and natural gas fuel system installation services, body, chassis upfitting, and component installation services; and vehicle telematics products, as well as sells new and used trailers, and tires for use on commercial vehicles. The company serves regional and national fleets, corporations, local and state governments, and owner-operators. It operates a network of centers located in the states of Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Missouri, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia, and Ontario. Rush Enterprises, Inc. was incorporated in 1965 and is headquartered in New Braunfels, Texas.