Navistar International Corporation (NYSE: NAV) and Terex Corporation (NYSE:TEX) are both mid-cap auto/tires/trucks companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Institutional and Insider Ownership

84.0% of Navistar International Corporation shares are held by institutional investors. Comparatively, 97.4% of Terex Corporation shares are held by institutional investors. 21.8% of Navistar International Corporation shares are held by company insiders. Comparatively, 2.5% of Terex Corporation 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.

Valuation & Earnings

This table compares Navistar International Corporation and Terex Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Navistar International Corporation $8.04 billion 0.55 $267.00 million ($1.66) -26.92
Terex Corporation $4.22 billion 0.96 $152.10 million ($0.63) -71.83

Navistar International Corporation has higher revenue and earnings than Terex Corporation. Terex Corporation is trading at a lower price-to-earnings ratio than Navistar International Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Navistar International Corporation and Terex Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Navistar International Corporation 1 7 3 0 2.18
Terex Corporation 3 6 5 0 2.14

Navistar International Corporation presently has a consensus target price of $33.20, suggesting a potential downside of 25.69%. Terex Corporation has a consensus target price of $37.75, suggesting a potential downside of 16.57%. Given Terex Corporation’s higher probable upside, analysts plainly believe Terex Corporation is more favorable than Navistar International Corporation.

Profitability

This table compares Navistar International Corporation and Terex Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Navistar International Corporation -1.73% N/A -2.03%
Terex Corporation -1.76% 4.98% 1.79%

Volatility and Risk

Navistar International Corporation has a beta of 2.8, indicating that its stock price is 180% more volatile than the S&P 500. Comparatively, Terex Corporation has a beta of 1.87, indicating that its stock price is 87% more volatile than the S&P 500.

Dividends

Terex Corporation pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Navistar International Corporation does not pay a dividend. Terex Corporation pays out -50.8% of its earnings in the form of a dividend. Navistar International Corporation has raised its dividend for 3 consecutive years.

Summary

Terex Corporation beats Navistar International Corporation on 9 of the 16 factors compared between the two stocks.

Navistar International Corporation Company Profile

Navistar International Corporation is a holding company whose principal operating entities are Navistar, Inc. and Navistar Financial Corporation (NFC). The Company’s segments include Truck, Parts, Global Operations (collectively, Manufacturing operations) and Financial Services, which consists of NFC and its foreign finance operations (collectively, Financial Services operations). The Truck segment manufactures and distributes Class 4 through 8 trucks, buses and military vehicles under the International and IC Bus brands, along with production of engines. The Parts segment supports its brands of International commercial trucks, IC buses and engines. The Global Operations segment includes operations of its subsidiary, International Industria de Motores da America do Sul Ltda. (IIAA). The Financial Services segment provides and manages retail, wholesale and lease financing of products sold by the Truck and Parts segments and their dealers.

Terex Corporation Company Profile

Terex Corporation is a manufacturer of lifting and material processing products and services that deliver lifecycle solutions. The Company has three business segments: Aerial Work Platforms (AWP), Cranes and Materials Processing (MP). It delivers lifecycle solutions to a range of industries, including the construction, infrastructure, manufacturing, shipping, utility, quarrying and mining industries. The AWP segment designs, manufactures, services and markets aerial work platform equipment, telehandlers and light towers. The AWP segment’s products are used by its customers to construct and maintain industrial, commercial and residential buildings and facilities, and for other commercial operations, as well as in a range of infrastructure projects. The Cranes segment’s products are used by its customers for construction and manufacturing facilities, among others. The MP segment’s products are used by its customers in construction, infrastructure and recycling projects.

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