Head-To-Head Review: Dana (NYSE:DAN) and AB Volvo (OTCMKTS:VLVLY)

AB Volvo (OTCMKTS:VLVLY) and Dana (NYSE:DAN) are both auto/tires/trucks companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Dividends

AB Volvo pays an annual dividend of $0.68 per share and has a dividend yield of 1.8%. Dana pays an annual dividend of $0.48 per share and has a dividend yield of 1.4%. AB Volvo pays out 33.3% of its earnings in the form of a dividend. Dana pays out 106.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AB Volvo is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares AB Volvo and Dana”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AB Volvo	$48.98 billion	1.54	$3.52 billion	$2.04	18.23
Dana	$10.28 billion	0.36	-$57.00 million	$0.45	75.76

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

Insider and Institutional Ownership

0.0% of AB Volvo shares are owned by institutional investors. Comparatively, 96.8% of Dana shares are owned by institutional investors. 0.5% of Dana shares are owned by company 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.

Profitability

This table compares AB Volvo and Dana’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AB Volvo	8.47%	23.01%	6.14%
Dana	0.64%	6.35%	1.06%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for AB Volvo and Dana, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AB Volvo	2	6	0	2	2.20
Dana	0	3	5	1	2.78

Dana has a consensus target price of $35.17, suggesting a potential upside of 3.16%. Given Dana’s stronger consensus rating and higher probable upside, analysts clearly believe Dana is more favorable than AB Volvo.

Risk and Volatility

AB Volvo has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Dana has a beta of 2.08, indicating that its share price is 108% more volatile than the S&P 500.

Summary

AB Volvo beats Dana on 10 of the 17 factors compared between the two stocks.

About AB Volvo

AB Volvo (publ), together with its subsidiaries, manufactures and sells trucks, buses, construction equipment, and marine and industrial engines in Europe, the United States, Asia, Africa, and Oceania. The company provides heavy-duty trucks for long-haulage and construction work and light-duty trucks for distribution purposes under the Volvo, Renault Trucks, Mack, Eicher, and Dongfeng Trucks brands; and city and intercity buses, coaches, and chassis under the Prevost and Volvo Bus brands. It offers road construction machine, haulers, wheel loaders, excavators, and compact equipment. In addition, the company offers engines and power solutions for leisure and commercial vessels, as well as for power generation, industrial, and off-highway applications under the Volvo Penta brand name. Further, it provides financing, insurance, rental, spare parts, repairs, preventive maintenance, service agreement, and assistance services. The company offers its products and services through a network of dealerships and workshops. It has a strategic alliance with Isuzu Motors within commercial vehicles; a partnership with Samsung SDI Co to develop batteries for its electric products; and an agreement with Aurora to develop autonomous trucks. AB Volvo (publ) was incorporated in 1915 and is headquartered in Gothenburg, Sweden.

About Dana

Dana Incorporated, together with its subsidiaries, provides power-conveyance and energy-management solutions for vehicles and machinery in North America, Europe, South America, and the Asia Pacific. The company operates through four segments: Light Vehicle Drive Systems, Commercial Vehicle Drive and Motion Systems, Off-Highway Drive and Motion Systems, and Power Technologies. It offers drive systems, including axles, driveshafts, transmission, and wheel and track drives; motion systems, such as winches, slew drives, and hub drives; and electrodynamic technologies comprised of motors, inverters, software and control systems, battery-management systems, and fuel cell plates. The company also provides sealing solutions, such as gaskets, seals, cam covers, and oil pan modules; thermal-management technologies, including transmission and engine oil cooling, battery and electronics cooling, charge air cooling, and thermal-acoustical protective shielding; and digital solutions that include active and passive system controls, as well as descriptive and predictive analytics. It serves vehicle manufacturers in the global light vehicle, medium/heavy vehicle, and off-highway markets, as well as the stationary industrial market. The company was formerly known as Dana Holding Corporation and changed its name to Dana Incorporated in August 2016. Dana Incorporated was founded in 1904 and is headquartered in Maumee, Ohio.