Financial Analysis: REV Group (NYSE:REVG) and Hub Group (NASDAQ:HUBG)

REV Group (NYSE:REVG) and Hub Group (NASDAQ:HUBG) are both mid-cap transportation companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.

Analyst Ratings

This is a breakdown of current ratings and target prices for REV Group and Hub Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
REV Group	1	3	1	1	2.33
Hub Group	1	8	8	0	2.41

REV Group currently has a consensus price target of $49.25, suggesting a potential downside of 22.93%. Hub Group has a consensus price target of $44.53, suggesting a potential upside of 7.39%. Given Hub Group’s stronger consensus rating and higher probable upside, analysts plainly believe Hub Group is more favorable than REV Group.

Valuation and Earnings

This table compares REV Group and Hub Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
REV Group	$2.46 billion	1.27	$95.20 million	$1.91	33.46
Hub Group	$3.95 billion	0.64	$103.99 million	$1.73	23.97

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

Dividends

REV Group pays an annual dividend of $0.24 per share and has a dividend yield of 0.4%. Hub Group pays an annual dividend of $0.50 per share and has a dividend yield of 1.2%. REV Group pays out 12.6% of its earnings in the form of a dividend. Hub Group pays out 28.9% 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. REV Group has raised its dividend for 1 consecutive years.

Risk & Volatility

REV Group has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, Hub Group has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.

Profitability

This table compares REV Group and Hub Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
REV Group	3.86%	31.67%	10.30%
Hub Group	2.82%	6.58%	3.97%

Insider & Institutional Ownership

46.8% of Hub Group shares are owned by institutional investors. 1.7% of REV Group shares are owned by insiders. Comparatively, 3.5% of Hub Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

REV Group beats Hub Group on 10 of the 18 factors compared between the two stocks.

About REV Group

REV Group, Inc., together with its subsidiaries, designs, manufactures, and distributes specialty vehicles, and related aftermarket parts and services in the United States, Canada, and internationally. It operates through three segments: Fire & Emergency, Commercial, and Recreation. The Fire & Emergency segment provides fire apparatus equipment under the Emergency One, Kovatch Mobile Equipment, Ferrara, Spartan Emergency Response, Smeal, Spartan Fire Chassis, and Ladder Tower brand names; and ambulances under the American Emergency Vehicles, Horton Emergency Vehicles, Leader Emergency Vehicles, Road Rescue, and Wheeled Coach brand names. The Commercial segment offers transit buses, type A school buses, sweepers, and terminal trucks under the Collins Bus, Eldorado National (California), Magellan, Capacity, and LayMor brand names. The Recreation segment offers motorized and towable RV models under the American Coach, Fleetwood RV, Holiday Rambler, Renegade RV, Midwest Automotive Designs, and Lance Camper brands; and produces a range of custom molded fiberglass products. The company sells its products to municipalities, government agencies, private contractors, consumers, and industrial and commercial end users through its direct sales force or dealer network. The company was formerly known as Allied Specialty Vehicles, Inc. and changed its name to REV Group, Inc. in November 2015. REV Group, Inc. was incorporated in 2008 and is based in Brookfield, Wisconsin.

About Hub Group

Hub Group, Inc., a supply chain solutions provider, offers transportation and logistics management services in North America. The company's transportation services include intermodal, truckload, less-than-truckload, flatbed, temperature-controlled, and dedicated and regional trucking, as well as final mile, railcar, small parcel, and international transportation. Its logistics services comprise full outsource logistics solution, transportation management, freight consolidation, warehousing and fulfillment, final mile delivery, and parcel and international services. The company also provides dry van, expedited, less-than-truckload, refrigerated, and flatbed truck brokerage services. It offers a fleet of approximately 2,300 tractors, 460 independent owner-operators, and 4,300 trailers to its customers, as well as the management and infrastructure. The company serves a range of industries, including retail, consumer products, and durable goods. As of December 31, 2023, it owned approximately 50,000 dry, 53-foot containers, as well as 900 refrigerated and 53-foot containers. The company was founded in 1971 and is headquartered in Oak Brook, Illinois.