Subaru (OTCMKTS: FUJHY) and Navistar International (NYSE:NAV) are both auto/tires/trucks companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.

Earnings and Valuation

This table compares Subaru and Navistar International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Subaru $30.75 billion 0.80 $1.99 billion $1.79 9.00
Navistar International $8.57 billion 0.44 $30.00 million $0.51 75.86

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Subaru and Navistar International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Subaru 0 0 0 0 N/A
Navistar International 1 8 8 0 2.41

Navistar International has a consensus price target of $43.73, suggesting a potential upside of 13.04%. Given Navistar International’s higher possible upside, analysts plainly believe Navistar International is more favorable than Subaru.

Dividends

Subaru pays an annual dividend of $0.25 per share and has a dividend yield of 1.6%. Navistar International does not pay a dividend. Subaru pays out 14.0% of its earnings in the form of a dividend.

Volatility and Risk

Subaru has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500. Comparatively, Navistar International has a beta of 2.5, meaning that its stock price is 150% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Subaru 5.91% 19.61% 10.45%
Navistar International 0.22% -1.78% 1.42%

Insider & Institutional Ownership

0.1% of Subaru shares are held by institutional investors. Comparatively, 81.8% of Navistar International shares are held by institutional investors. 18.0% of Navistar International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Subaru beats Navistar International on 8 of the 15 factors compared between the two stocks.

About Subaru

SUBARU CORPORATION, formerly Fuji Heavy Industries Ltd., is a manufacturer of Subaru automobiles. The Company’s segments include Automobiles, Aerospace, Industrial products and Other. The Automobile segment manufactures and sells vehicles and related products. The Aerospace segment manufactures aircrafts, parts of space-related devices. The Industrial products segment manufactures and sells Robin engines and related products. The Other segment consists of garbage collection vehicles, specialized vehicles and real estate lease. It offers a platform, called the Subaru Global Platform, which is a Subaru technology for unifying development of all of its models under a single platform design. It manufactures, repairs and sells airplanes aerospace-related machinery and their components. It also manufactures, sells and repairs generators, engine-equipped machinery, agricultural machinery, construction machinery other machine tools and their components.

About Navistar International

Navistar International Corporation manufactures and sells commercial and military trucks, diesel engines, school and commercial buses, and service parts for trucks and diesel engines worldwide. The company operates through four segments: Truck, Parts, Global Operations, and Financial Services. It manufactures and distributes Class 4 through 8 trucks and buses in the common carrier, private carrier, government, leasing, construction, energy/petroleum, military vehicle, and student and commercial transportation markets under the International and IC brands; and designs, engineers, and produces sheet metal components, including truck cabs and engines. The company also provides customers with proprietary products needed to support the International commercial and military truck, IC bus, and engine lines, as well as other product lines; and a selection of other standard truck, trailer, and engine aftermarket parts. In addition, it designs and manufactures mid-range diesel engines, as well as provides customers with additional engine offerings in the agriculture, marine, and light truck markets; sells engines to original equipment manufacturers (OEM) for various on-and-off-road applications; and offers contract manufacturing services under the MWM brand to OEMs for the assembly of their engines. Further, the company provides retail, wholesale, and lease financing of products of its trucks and parts, as well as financing for wholesale and retail accounts receivable. It markets its commercial products through an independent dealer network, as well as through distribution and service network retail outlets; and its reconditioned used trucks to owner-operators and fleet buyers through its network of used truck dealers. As of October 31, 2017, it had approximately 728 outlets in the United States and Canada, and 87 outlets in Mexico. Navistar International Corporation was founded in 1902 and is headquartered in Lisle, Illinois.

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