Wabash National (NYSE:WNC – Get Free Report) and BorgWarner (NYSE:BWA – Get Free Report) are both auto/tires/trucks companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.
Risk and Volatility
Wabash National has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500. Comparatively, BorgWarner has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.
Dividends
Wabash National pays an annual dividend of $0.32 per share and has a dividend yield of 2.4%. BorgWarner pays an annual dividend of $0.68 per share and has a dividend yield of 1.1%. Wabash National pays out -20.0% of its earnings in the form of a dividend. BorgWarner pays out 40.2% 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. BorgWarner has raised its dividend for 1 consecutive years. Wabash National is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Wabash National | -4.41% | -30.16% | -8.79% |
| BorgWarner | 2.53% | 18.36% | 7.65% |
Analyst Recommendations
This is a summary of recent ratings and price targets for Wabash National and BorgWarner, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Wabash National | 1 | 1 | 2 | 0 | 2.25 |
| BorgWarner | 0 | 6 | 9 | 0 | 2.60 |
Wabash National presently has a consensus price target of $18.00, suggesting a potential upside of 35.01%. BorgWarner has a consensus price target of $74.57, suggesting a potential upside of 15.75%. Given Wabash National’s higher probable upside, equities analysts plainly believe Wabash National is more favorable than BorgWarner.
Valuation & Earnings
This table compares Wabash National and BorgWarner”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Wabash National | $1.54 billion | 0.35 | $211.45 million | ($1.60) | -8.33 |
| BorgWarner | $14.32 billion | 0.92 | $277.00 million | $1.69 | 38.12 |
BorgWarner has higher revenue and earnings than Wabash National. Wabash National is trading at a lower price-to-earnings ratio than BorgWarner, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
97.0% of Wabash National shares are owned by institutional investors. Comparatively, 95.7% of BorgWarner shares are owned by institutional investors. 2.8% of Wabash National shares are owned by company insiders. Comparatively, 0.8% of BorgWarner shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Summary
BorgWarner beats Wabash National on 11 of the 17 factors compared between the two stocks.
About Wabash National
Wabash National Corporation provides connected solutions for the transportation, logistics, and distribution industries primarily in the United States. The company operates through two segments, Transportation Solutions and Parts & Services. The Transportation Solutions segment designs and manufactures transportation-related equipment and products dry and refrigerated van trailers, platform trailers, tank trailers, and truck-mounted tanks; truck bodies for dry-freight transportation; cargo and cargo XL bodies for commercial applications; refrigerated truck bodies; platform truck bodies; and used trailers, as well as laminated hardwood oak flooring products. The Parts & Services segment provides aftermarket parts and services; steel flatbed bodies, truck body mounting, shelving for package delivery, partitions, roof racks, hitches, liftgates, thermal solutions, and others; truck body repair parts; and door repair and replacement, collision repair, and basic maintenance services. It also develops and scales a digital marketplace for the transportation and logistics distribution industry; operates a parts and services distribution platform; and stainless steel storage tanks and silos, mixers, and processors for the dairy, food and beverage, pharmaceutical, chemical, craft brewing, and biotech markets; trailers as a service; and composite products, including truck bodies, overhead doors, and other industrial application products, as well as used trailers. The company offers its products under the Wabash, DuraPlate, DuraPlateHD, DuraPlate AeroSkirt, and AeroSkirt CX brands, as well as EcoNex brand. It serves its products to truckload common carriers, leasing companies, private fleet carriers, less-than-truckload common carriers, and package carriers. Wabash National Corporation was founded in 1985 and is headquartered in Lafayette, Indiana.
About BorgWarner
BorgWarner Inc., together with its subsidiaries, provides solutions for combustion, hybrid, and electric vehicles worldwide. It offers turbochargers, eBoosters, eTurbos, timing systems, emissions systems, thermal systems, gasoline ignition technology, smart remote actuators, powertrain sensors, cabin heaters, battery modules and systems, battery heaters, and battery charging. The company provides power electronics, control modules, software, friction, and mechanical products for automatic transmissions and torque-management products. It sells its products to original equipment manufacturers of light vehicles, which comprise passenger cars, sport-utility vehicles, vans, and light trucks; commercial vehicles, including medium-duty and heavy-duty trucks, and buses; and off-highway vehicles, such as agricultural and construction machinery, and marine applications, as well as to tier one vehicle systems suppliers and the aftermarket for light, commercial, and off-highway vehicles. The company was formerly known as Borg-Warner Automotive, Inc. BorgWarner Inc. was incorporated in 1987 and is headquartered in Auburn Hills, Michigan.
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