Polaris (NYSE:PII) 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 valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.
Earnings and Valuation
This table compares Polaris and Genuine Parts' revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Polaris | $6.78 billion | 1.32 | $323.96 million | $6.32 | 22.95 |
Genuine Parts | $19.39 billion | 0.89 | $621.09 million | $5.69 | 21.09 |
Genuine Parts has higher revenue and earnings than Polaris. Genuine Parts is trading at a lower price-to-earnings ratio than Polaris, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Polaris has a beta of 2.05, indicating that its stock price is 105% more volatile than the S&P 500. Comparatively, Genuine Parts has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and price targets for Polaris and Genuine Parts, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Polaris | 0 | 4 | 10 | 1 | 2.80 |
Genuine Parts | 1 | 2 | 1 | 0 | 2.00 |
Polaris presently has a consensus price target of $123.8667, indicating a potential downside of 14.59%. Genuine Parts has a consensus price target of $104.40, indicating a potential downside of 13.01%. Given Genuine Parts' higher probable upside, analysts plainly believe Genuine Parts is more favorable than Polaris.
Institutional & Insider Ownership
73.7% of Polaris shares are owned by institutional investors. Comparatively, 76.9% of Genuine Parts shares are owned by institutional investors. 3.2% of Polaris shares are owned by insiders. Comparatively, 3.0% of Genuine Parts shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Profitability
This table compares Polaris and Genuine Parts' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Polaris | 0.38% | 40.78% | 8.50% |
Genuine Parts | -1.10% | 23.26% | 5.43% |
Dividends
Polaris pays an annual dividend of $2.52 per share and has a dividend yield of 1.7%. Genuine Parts pays an annual dividend of $3.26 per share and has a dividend yield of 2.7%. Polaris pays out 39.9% of its earnings in the form of a dividend. Genuine Parts pays out 57.3% 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. Polaris has increased its dividend for 1 consecutive years and Genuine Parts has increased its dividend for 59 consecutive years. Genuine Parts is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Polaris beats Genuine Parts on 12 of the 18 factors compared between the two stocks.