Head-To-Head Comparison: Rush Enterprises (NASDAQ:RUSHA) vs. Ferguson (NYSE:FERG)

Ferguson (NYSE:FERG) and Rush Enterprises (NASDAQ:RUSHA) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitability.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Ferguson and Rush Enterprises, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferguson	0	5	11	1	2.76
Rush Enterprises	0	2	3	0	2.60

Ferguson presently has a consensus price target of $284.86, suggesting a potential upside of 15.63%. Rush Enterprises has a consensus price target of $58.00, suggesting a potential downside of 27.88%. Given Ferguson’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Ferguson is more favorable than Rush Enterprises.

Dividends

Ferguson pays an annual dividend of $3.56 per share and has a dividend yield of 1.4%. Rush Enterprises pays an annual dividend of $0.76 per share and has a dividend yield of 0.9%. Ferguson pays out 41.4% of its earnings in the form of a dividend. Rush Enterprises pays out 22.9% 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 raised its dividend for 6 consecutive years.

Earnings and Valuation

This table compares Ferguson and Rush Enterprises”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferguson	$31.32 billion	1.53	$1.86 billion	$8.60	28.65
Rush Enterprises	$7.43 billion	0.84	$263.78 million	$3.32	24.22

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

Volatility and Risk

Ferguson has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Rush Enterprises has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Profitability

This table compares Ferguson and Rush Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ferguson	6.82%	37.68%	12.58%
Rush Enterprises	3.67%	11.65%	5.84%

Institutional & Insider Ownership

82.0% of Ferguson shares are owned by institutional investors. Comparatively, 84.4% of Rush Enterprises shares are owned by institutional investors. 0.2% of Ferguson shares are owned by insiders. Comparatively, 12.7% of Rush Enterprises shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Ferguson beats Rush Enterprises on 14 of the 18 factors compared between the two stocks.

About Ferguson

Ferguson Enterprises Inc. distributes plumbing and heating products in North America. The company provides expertise, solutions, and products, including infrastructure, plumbing, appliances, fire, and fabrication, as well as heating, ventilation, and air conditioning (HVAC) to residential and non-residential customers. It also supplies specialist water and wastewater treatment products to residential, commercial, and infrastructure contractors, as well as supplies pipe, valves, and fittings solutions to industrial customers. In addition, it offers customized solutions, such as virtual design, fabrication, valve actuation, pre-assembly, kitting, installation, and project management services, as well as after-sales support that comprises warranty, credit, project-based billing, returns and maintenance, and repair and operations support. The company sells its products through a network of distribution centers, branches, counter service and specialist sales associates, showroom consultants, and e-commerce channels. Ferguson Enterprises Inc. was founded in 1953 and is headquartered in Newport News, Virginia.

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.