Harley-Davidson (NYSE:HOG) and Genuine Parts (NYSE:GPC) are both auto/tires/trucks companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.
Dividends
Harley-Davidson pays an annual dividend of $0.08 per share and has a dividend yield of 0.2%. Genuine Parts pays an annual dividend of $3.16 per share and has a dividend yield of 3.2%. Harley-Davidson pays out 2.4% of its earnings in the form of a dividend. Genuine Parts pays out 55.5% 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. Harley-Davidson has increased its dividend for 1 consecutive years and Genuine Parts has increased its dividend for 58 consecutive years. Genuine Parts is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Harley-Davidson and Genuine Parts' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Harley-Davidson | $5.36 billion | 1.14 | $423.64 million | $3.36 | 11.85 |
| Genuine Parts | $19.39 billion | 0.73 | $621.09 million | $5.69 | 17.31 |
Genuine Parts has higher revenue and earnings than Harley-Davidson. Harley-Davidson is trading at a lower price-to-earnings ratio than Genuine Parts, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Harley-Davidson and Genuine Parts' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Harley-Davidson | 2.53% | 12.61% | 1.84% |
| Genuine Parts | -1.10% | 23.26% | 5.43% |
Insider & Institutional Ownership
87.2% of Harley-Davidson shares are owned by institutional investors. Comparatively, 77.4% of Genuine Parts shares are owned by institutional investors. 0.9% of Harley-Davidson shares are owned by company insiders. Comparatively, 3.0% of Genuine Parts shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of current recommendations and price targets for Harley-Davidson and Genuine Parts, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Harley-Davidson | 0 | 10 | 8 | 0 | 2.44 |
| Genuine Parts | 0 | 3 | 3 | 0 | 2.50 |
Harley-Davidson presently has a consensus target price of $35.5714, suggesting a potential downside of 11.82%. Genuine Parts has a consensus target price of $98.1429, suggesting a potential upside of 1.05%. Given Genuine Parts' stronger consensus rating and higher probable upside, analysts plainly believe Genuine Parts is more favorable than Harley-Davidson.
Risk and Volatility
Harley-Davidson has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500. Comparatively, Genuine Parts has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.
Summary
Genuine Parts beats Harley-Davidson on 10 of the 17 factors compared between the two stocks.
