Reviewing Reliance (NYSE:RS) and Rush Enterprises (NASDAQ:RUSHA)

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

Dividends

Reliance pays an annual dividend of $5.00 per share and has a dividend yield of 1.3%. Rush Enterprises pays an annual dividend of $0.51 per share and has a dividend yield of 1.1%. Reliance pays out 29.1% of its earnings in the form of a dividend. Rush Enterprises pays out 23.1% 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. Reliance has increased its dividend for 15 consecutive years and Rush Enterprises has increased its dividend for 6 consecutive years. Reliance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Reliance	5.65%	12.51%	8.47%
Rush Enterprises	3.67%	11.65%	5.84%

Insider & Institutional Ownership

79.3% of Reliance shares are held by institutional investors. Comparatively, 84.4% of Rush Enterprises shares are held by institutional investors. 0.4% of Reliance shares are held by insiders. Comparatively, 12.7% of Rush Enterprises shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Reliance 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
Reliance	$14.29 billion	1.40	$739.40 million	$17.20	22.83
Rush Enterprises	$7.43 billion	0.76	$263.78 million	$2.21	21.81

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

Volatility and Risk

Reliance has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Rush Enterprises has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Reliance and Rush Enterprises, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reliance	1	5	2	1	2.33
Rush Enterprises	1	1	3	0	2.40

Reliance presently has a consensus target price of $379.83, suggesting a potential downside of 3.29%. Rush Enterprises has a consensus target price of $46.00, suggesting a potential downside of 4.56%. Given Reliance’s higher probable upside, analysts clearly believe Reliance is more favorable than Rush Enterprises.

Summary

Reliance beats Rush Enterprises on 13 of the 18 factors compared between the two stocks.

About Reliance

Reliance, Inc. operates as a diversified metal solutions provider and the metals service center company in the United States, Canada, and internationally. The company distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products; and provides metals processing services to general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and heavy industries. It sells its products directly to original equipment manufacturers, which primarily include small machine shops and fabricators. The company was formerly known as Reliance Steel & Aluminum Co. and changed its name to Reliance, Inc. in February 2024. Reliance, Inc. was founded in 1939 and is based in Scottsdale, Arizona.

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.