Air Lease (NYSE:AL) and Rush Enterprises (NASDAQ:RUSHA) are both mid-cap transportation companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.
Volatility and Risk
Air Lease has a beta of 2.2, indicating that its stock price is 120% more volatile than the S&P 500. Comparatively, Rush Enterprises has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500.
Dividends
Air Lease pays an annual dividend of $0.64 per share and has a dividend yield of 1.3%. Rush Enterprises pays an annual dividend of $0.72 per share and has a dividend yield of 1.7%. Air Lease pays out 12.6% of its earnings in the form of a dividend. Rush Enterprises pays out 28.7% 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. Air Lease has increased its dividend for 1 consecutive years and Rush Enterprises has increased its dividend for 2 consecutive years. Rush Enterprises is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a summary of recent ratings and target prices for Air Lease and Rush Enterprises, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Air Lease | 0 | 0 | 4 | 0 | 3.00 |
Rush Enterprises | 0 | 2 | 0 | 0 | 2.00 |
Air Lease currently has a consensus target price of $44.25, suggesting a potential downside of 7.19%. Rush Enterprises has a consensus target price of $32.00, suggesting a potential downside of 26.62%. Given Air Lease's stronger consensus rating and higher possible upside, equities research analysts plainly believe Air Lease is more favorable than Rush Enterprises.
Institutional and Insider Ownership
94.8% of Air Lease shares are owned by institutional investors. Comparatively, 49.0% of Rush Enterprises shares are owned by institutional investors. 6.9% of Air Lease shares are owned by insiders. Comparatively, 12.5% of Rush Enterprises shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Air Lease and Rush Enterprises' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Air Lease | 27.48% | 9.83% | 2.51% |
Rush Enterprises | 2.04% | 8.24% | 3.07% |
Earnings and Valuation
This table compares Air Lease and Rush Enterprises' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Air Lease | $2.02 billion | 2.69 | $587.12 million | $5.09 | 9.37 |
Rush Enterprises | $5.81 billion | 0.41 | $141.58 million | $2.51 | 17.37 |
Air Lease has higher earnings, but lower revenue than Rush Enterprises. Air Lease is trading at a lower price-to-earnings ratio than Rush Enterprises, indicating that it is currently the more affordable of the two stocks.
Summary
Air Lease beats Rush Enterprises on 11 of the 17 factors compared between the two stocks.