Critical Contrast: Deere & (NYSE:DE) & Navistar International Corporation (NAV)

Navistar International Corporation (NYSE: NAV) and Deere & (NYSE:DE) are both mid-cap auto/tires/trucks companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, earnings, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Navistar International Corporation and Deere &’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Navistar International Corporation -2.66% N/A -2.88%
Deere & 6.52% 24.85% 3.05%

Dividends

Deere & pays an annual dividend of $2.40 per share and has a dividend yield of 2.0%. Navistar International Corporation does not pay a dividend. Deere & pays out 43.2% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations for Navistar International Corporation and Deere &, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Navistar International Corporation 2 8 3 0 2.08
Deere & 3 14 8 0 2.20

Navistar International Corporation currently has a consensus price target of $27.00, suggesting a potential downside of 11.04%. Deere & has a consensus price target of $123.54, suggesting a potential upside of 5.31%. Given Deere &’s stronger consensus rating and higher possible upside, analysts clearly believe Deere & is more favorable than Navistar International Corporation.

Institutional & Insider Ownership

82.4% of Navistar International Corporation shares are owned by institutional investors. Comparatively, 67.9% of Deere & shares are owned by institutional investors. 21.8% of Navistar International Corporation shares are owned by insiders. Comparatively, 0.9% of Deere & shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Navistar International Corporation has a beta of 2.71, meaning that its stock price is 171% more volatile than the S&P 500. Comparatively, Deere & has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.

Valuation & Earnings

This table compares Navistar International Corporation and Deere &’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Navistar International Corporation $7.91 billion 0.38 $260.00 million ($2.46) -12.34
Deere & $26.78 billion 1.40 $3.98 billion $5.55 21.14

Deere & has higher revenue and earnings than Navistar International Corporation. Navistar International Corporation is trading at a lower price-to-earnings ratio than Deere &, indicating that it is currently the more affordable of the two stocks.

Summary

Deere & beats Navistar International Corporation on 11 of the 15 factors compared between the two stocks.

Navistar International Corporation Company Profile

Navistar International Corporation is a holding company whose principal operating entities are Navistar, Inc. and Navistar Financial Corporation (NFC). The Company’s segments include Truck, Parts, Global Operations (collectively, Manufacturing operations) and Financial Services, which consists of NFC and its foreign finance operations (collectively, Financial Services operations). The Truck segment manufactures and distributes Class 4 through 8 trucks, buses and military vehicles under the International and IC Bus brands, along with production of engines. The Parts segment supports its brands of International commercial trucks, IC buses and engines. The Global Operations segment includes operations of its subsidiary, International Industria de Motores da America do Sul Ltda. (IIAA). The Financial Services segment provides and manages retail, wholesale and lease financing of products sold by the Truck and Parts segments and their dealers.

Deere & Company Profile

Deere & Company is engaged in equipment operations. The Company is engaged in providing financial services. The Company operates through three business segments: agriculture and turf, construction and forestry, and financial services. The agriculture and turf segment manufactures and distributes a line of agriculture and turf equipment and related service parts. The construction and forestry segment provides a line of construction equipment, and forestry machines and attachments available in the world. The construction and forestry segment is also engaged in providing fleet management telematics solutions. The financial services segment primarily finances sales and leases by the Company dealers of new and used agriculture and turf equipment and construction and forestry equipment. The financial services segment also provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts and offers extended equipment warranties.

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