Tata Motors (NYSE: TTM) and Rev Group (NYSE:REVG) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Profitability

This table compares Tata Motors and Rev Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tata Motors 4.05% 14.78% 3.54%
Rev Group 0.98% 10.51% 3.95%

Insider and Institutional Ownership

10.9% of Tata Motors shares are owned by institutional investors. Comparatively, 25.0% of Rev Group shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Rev Group pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. Tata Motors does not pay a dividend.

Analyst Ratings

This is a summary of current recommendations and price targets for Tata Motors and Rev Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tata Motors 0 2 2 0 2.50
Rev Group 0 3 8 0 2.73

Tata Motors currently has a consensus target price of $30.00, suggesting a potential downside of 4.37%. Rev Group has a consensus target price of $32.44, suggesting a potential upside of 17.68%. Given Rev Group’s stronger consensus rating and higher possible upside, analysts clearly believe Rev Group is more favorable than Tata Motors.

Earnings & Valuation

This table compares Tata Motors and Rev Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tata Motors $41.04 billion 0.52 $943.80 million $4.51 6.96
Rev Group $1.93 billion 0.92 $30.19 million N/A N/A

Tata Motors has higher revenue and earnings than Rev Group.

Summary

Rev Group beats Tata Motors on 7 of the 11 factors compared between the two stocks.

About Tata Motors

Tata Motors Limited is an automobile company. The Company is engaged in manufacture of motor vehicles. The Company is engaged mainly in the business of automobile products consisting of all types of commercial and passenger vehicles, including financing of the vehicles sold by the Company. The Company’s segments include automotive operations and all other operations. The Company’s automotive segment operations include all activities relating to the development, design, manufacture, assembly and sale of vehicles, including vehicle financing, as well as sale of related parts and accessories. In the automotive segment, the Company manufactures and sells passenger cars, utility vehicles, light commercial vehicles, and medium and heavy commercial vehicles. The Company’s all other operations segment mainly includes information technology (IT) services, and machine tools and factory automation services. The Company operates in over 160 countries across the world.

About Rev Group

REV Group, Inc. is a designer, manufacturer and distributor of specialty vehicles and related aftermarket parts and services. The Company operates through three segments: Fire & Emergency, Commercial and Recreation. The Company provides customized vehicle solutions for applications, including essential needs (ambulances, fire apparatus, school buses, mobility vans and municipal transit buses), industrial and commercial (terminal trucks, cut-away buses and street sweepers) and consumer leisure (recreational vehicles (RVs) and luxury buses). The Fire & Emergency segment manufactures a range of fire apparatus and ambulance products. The Commercial segment manufactures transit and shuttle buses, Type A school buses, mobility vans, and other specialty vehicles, including sweepers and terminal trucks distributed both through dealers and direct. The Recreation segment manufactures motorized RV products sold to brand-loyal, repeat customers who purchase through dealers.

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