Greenbrier Companies, Inc. (The) (NYSE: GBX) and American Railcar Industries (NASDAQ:ARII) are both small-cap transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Greenbrier Companies, Inc. (The) and American Railcar Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Greenbrier Companies, Inc. (The) 2 3 4 0 2.22
American Railcar Industries 0 3 1 0 2.25

Greenbrier Companies, Inc. (The) currently has a consensus price target of $47.14, suggesting a potential upside of 6.30%. American Railcar Industries has a consensus price target of $38.33, suggesting a potential upside of 8.87%. Given American Railcar Industries’ stronger consensus rating and higher possible upside, analysts plainly believe American Railcar Industries is more favorable than Greenbrier Companies, Inc. (The).

Dividends

Greenbrier Companies, Inc. (The) pays an annual dividend of $0.88 per share and has a dividend yield of 2.0%. American Railcar Industries pays an annual dividend of $1.60 per share and has a dividend yield of 4.5%. Greenbrier Companies, Inc. (The) pays out 22.2% of its earnings in the form of a dividend. American Railcar Industries pays out 59.7% 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.

Insider and Institutional Ownership

93.9% of American Railcar Industries shares are held by institutional investors. 4.6% of Greenbrier Companies, Inc. (The) shares are held by insiders. Comparatively, 0.0% of American Railcar Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Greenbrier Companies, Inc. (The) has a beta of 1.86, meaning that its share price is 86% more volatile than the S&P 500. Comparatively, American Railcar Industries has a beta of 2.32, meaning that its share price is 132% more volatile than the S&P 500.

Earnings and Valuation

This table compares Greenbrier Companies, Inc. (The) and American Railcar Industries’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Greenbrier Companies, Inc. (The) $2.15 billion 0.59 $345.21 million $3.97 11.17
American Railcar Industries $536.17 million 1.25 $152.16 million $2.68 13.14

Greenbrier Companies, Inc. (The) has higher revenue and earnings than American Railcar Industries. Greenbrier Companies, Inc. (The) is trading at a lower price-to-earnings ratio than American Railcar Industries, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Greenbrier Companies, Inc. (The) and American Railcar Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Greenbrier Companies, Inc. (The) 5.85% 11.74% 6.31%
American Railcar Industries 9.59% 11.40% 4.31%

About Greenbrier Companies, Inc. (The)

The Greenbrier Companies, Inc. is a designer, manufacturer and marketer of railroad freight car equipment in North America and Europe; a manufacturer and marketer of marine barges in North America; a provider of wheel services, parts, leasing and other services to the railroad and related transportation industries in North America, and a provider of railcar repair, refurbishment and retrofitting services in North America through a joint venture partnership. It operates in four segments: Manufacturing; Wheels & Parts; Leasing & Services, and GBW Joint Venture. It also produces rail castings and tank heads through unconsolidated joint ventures. It operates an integrated business model in North America that combines freight car manufacturing, wheel services, repair, refurbishment, retrofitting, component parts, leasing and fleet management services. Its customers include railroads, leasing companies, financial institutions, shippers, carriers and transportation companies.

About American Railcar Industries

American Railcar Industries, Inc. is a designer and manufacturer of hopper and tank railcars. The Company designs and manufactures railcars and a range of components for the North American railcar and industrial markets. It operates through three segments: manufacturing, railcar leasing and railcar services. The Company’s Manufacturing segment consists of railcar manufacturing and railcar and industrial component manufacturing. The Railcar leasing segment consists of railcars manufactured by it and leased to third parties under operating leases. The Railcar services segment consists of railcar repair, engineering and field services. As of December 31, 2016, the Company’s operations included eight manufacturing plants that fabricate and assemble raw materials, mainly steel, into railcars, railcar components and industrial components; eight railcar repair plants; and 11 mobile repair (mobile units) and mini repair shop (mini shop) locations.

Receive News & Ratings for Greenbrier Companies Inc. (The) Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Greenbrier Companies Inc. (The) and related companies with Analyst Ratings Network's FREE daily email newsletter.