Head to Head Contrast: CNH Industrial (NYSE:CNH) & Snap-On (NYSE:SNA)

CNH Industrial (NYSE:CNH) and Snap-On (NYSE:SNA) are both large-cap industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Profitability

This table compares CNH Industrial and Snap-On’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CNH Industrial	1.44%	7.94%	1.47%
Snap-On	20.82%	16.77%	11.82%

Dividends

CNH Industrial pays an annual dividend of $0.10 per share and has a dividend yield of 0.8%. Snap-On pays an annual dividend of $9.76 per share and has a dividend yield of 2.6%. CNH Industrial pays out 40.0% of its earnings in the form of a dividend. Snap-On pays out 50.8% 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. Snap-On has increased its dividend for 15 consecutive years. Snap-On is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares CNH Industrial and Snap-On”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CNH Industrial	$18.09 billion	0.85	$510.00 million	$0.25	49.98
Snap-On	$4.74 billion	4.08	$1.02 billion	$19.23	19.49

Snap-On has lower revenue, but higher earnings than CNH Industrial. Snap-On is trading at a lower price-to-earnings ratio than CNH Industrial, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

CNH Industrial has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, Snap-On has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Institutional & Insider Ownership

59.9% of CNH Industrial shares are held by institutional investors. Comparatively, 84.9% of Snap-On shares are held by institutional investors. 0.2% of CNH Industrial shares are held by insiders. Comparatively, 3.8% of Snap-On shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for CNH Industrial and Snap-On, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CNH Industrial	1	5	8	0	2.50
Snap-On	0	1	4	0	2.80

CNH Industrial currently has a consensus price target of $14.04, suggesting a potential upside of 12.34%. Snap-On has a consensus price target of $434.00, suggesting a potential upside of 15.81%. Given Snap-On’s stronger consensus rating and higher possible upside, analysts clearly believe Snap-On is more favorable than CNH Industrial.

Summary

Snap-On beats CNH Industrial on 12 of the 17 factors compared between the two stocks.

About CNH Industrial

CNH Industrial is a global manufacturer of agricultural and construction equipment. Its agricultural brands include Case IH, New Holland Agriculture and STEYR, which offer products such as tractors, combines, harvesters, sprayers and hay tools. Its construction equipment brands include CASE Construction Equipment and New Holland Construction, with machinery such as excavators, loaders and graders. The company also provides parts, equipment support and precision technology designed to help customers manage machinery and improve productivity.

About Snap-On

Snap-on Incorporated develops, manufactures and markets tools, equipment, diagnostics and information systems for professional users. Its offerings include hand and power tools, tool storage, vehicle diagnostic equipment, shop equipment, repair information and software, and related products and services. The company serves customers in vehicle repair and other industries, including aviation, aerospace, agriculture, construction and manufacturing. Its products and services reach customers in the United States and international markets.