Analyzing Rush Enterprises (NASDAQ:RUSHA) and Park-Ohio (NASDAQ:PKOH)

Park-Ohio (NASDAQ:PKOH) and Rush Enterprises (NASDAQ:RUSHA) are both industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, earnings, profitability and risk.

Analyst Ratings

This is a breakdown of recent recommendations for Park-Ohio and Rush Enterprises, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Park-Ohio	0	0	2	1	3.33
Rush Enterprises	1	1	3	0	2.40

Park-Ohio presently has a consensus price target of $59.00, suggesting a potential upside of 19.77%. Rush Enterprises has a consensus price target of $46.00, suggesting a potential upside of 3.42%. Given Park-Ohio’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Park-Ohio is more favorable than Rush Enterprises.

Dividends

Park-Ohio pays an annual dividend of $0.50 per share and has a dividend yield of 1.0%. Rush Enterprises pays an annual dividend of $0.56 per share and has a dividend yield of 1.3%. Park-Ohio pays out 26.6% of its earnings in the form of a dividend. Rush Enterprises pays out 25.3% 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. Rush Enterprises has increased its dividend for 6 consecutive years. Rush Enterprises is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Park-Ohio and Rush Enterprises”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Park-Ohio	$1.60 billion	0.45	$23.80 million	$1.88	26.20
Rush Enterprises	$7.43 billion	0.70	$263.78 million	$2.21	20.13

Rush Enterprises has higher revenue and earnings than Park-Ohio. Rush Enterprises is trading at a lower price-to-earnings ratio than Park-Ohio, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Park-Ohio and Rush Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Park-Ohio	1.60%	10.55%	2.81%
Rush Enterprises	3.67%	11.65%	5.84%

Volatility and Risk

Park-Ohio has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Rush Enterprises has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Insider and Institutional Ownership

51.4% of Park-Ohio shares are owned by institutional investors. Comparatively, 84.4% of Rush Enterprises shares are owned by institutional investors. 31.1% of Park-Ohio shares are owned by company insiders. Comparatively, 12.7% of Rush Enterprises shares are owned 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

Rush Enterprises beats Park-Ohio on 13 of the 18 factors compared between the two stocks.

About Park-Ohio

Park-Ohio Holdings Corp. provides supply chain management outsourcing services, capital equipment, and manufactured components in the United States, Europe, Asia, Mexico, Canada, and internationally. It operates through three segments: Supply Technologies, Assembly Components, and Engineered Products. The Supply Technologies segment offers Total Supply Management that comprises engineering and design support, part usage and cost analysis, supplier selection, quality assurance, bar coding, product packaging and tracking, just-in-time and point-of-use delivery, electronic billing, and ongoing technical support services, as well as provides spare parts and aftermarket products; and production components, such as valves, fuel hose assemblies, electro-mechanical hardware, labels, fittings, steering components, and other products. This segment also engineers and manufactures precision cold-formed and cold-extruded fasteners, and other products comprising locknuts, SPAC nuts, SPAC bolts, and wheel hardware. The Assembly Components segment offers direct fuel injection fuel rails and pipes, fuel filler pipes, and flexible multi-layer plastic and rubber assemblies; turbo charging and coolant hoses; and value-added services comprising design engineering, machining, and parts assembly. The Engineered Products segment provides engineered products, including induction heating and melting systems, pipe threading systems, and forged and machined products for ferrous and non-ferrous metals, silicon, coatings, forging, foundry, automotive, and construction equipment industries; engineers and installs mechanical forging presses; sells spare parts; field services; and forges aerospace and defense structural components, such as landing gears and struts, as well as rail products comprising railcar center plates and draft lugs. Park-Ohio Holdings Corp. was founded in 1907 and is headquartered in Cleveland, Ohio.

About Rush Enterprises

Rush Enterprises, Inc., through its subsidiaries, operates as an integrated retailer of commercial vehicles and related services in the United States and Canada. The company operates a network of commercial vehicle dealerships under the Rush Truck Centers name. Its Rush Truck Centers primarily sell commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, IC Bus, Blue Bird, and Dennis Eagle. The company also offers new and used commercial vehicles, and aftermarket parts, as well as service and repair, financing, and leasing and rental services; and offers property and casualty insurance, including collision and liability insurance on commercial vehicles, cargo insurance, and credit life insurance products. In addition, it provides equipment installation and repair, parts installation, and paint and body repair services; new vehicle pre-delivery inspection, truck modification, and natural gas fuel system installation services, body, chassis upfitting, and component installation services; and vehicle telematics products, as well as sells new and used trailers, and tires for use on commercial vehicles. The company serves regional and national fleets, corporations, local and state governments, and owner-operators. It operates a network of centers located in the states of Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Missouri, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia, and Ontario. Rush Enterprises, Inc. was incorporated in 1965 and is headquartered in New Braunfels, Texas.