Critical Comparison: Harley-Davidson (NYSE:HOG) versus Mercedes-Benz Group (OTCMKTS:MBGYY)

Harley-Davidson (NYSE:HOG) and Mercedes-Benz Group (OTCMKTS:MBGYY) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, earnings, profitability and institutional ownership.

Institutional & Insider Ownership

85.1% of Harley-Davidson shares are held by institutional investors. 1.0% of Harley-Davidson shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Harley-Davidson has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Mercedes-Benz Group has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.

Profitability

This table compares Harley-Davidson and Mercedes-Benz Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Harley-Davidson	4.78%	6.28%	2.45%
Mercedes-Benz Group	3.89%	5.41%	1.97%

Valuation & Earnings

This table compares Harley-Davidson and Mercedes-Benz Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Harley-Davidson	$4.24 billion	0.68	$338.74 million	$1.63	16.91
Mercedes-Benz Group	$149.55 billion	0.35	$5.82 billion	C$1.55	8.65

Mercedes-Benz Group has higher revenue and earnings than Harley-Davidson. Mercedes-Benz Group is trading at a lower price-to-earnings ratio than Harley-Davidson, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for Harley-Davidson and Mercedes-Benz Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Harley-Davidson	2	5	4	1	2.33
Mercedes-Benz Group	0	2	0	4	3.33

Harley-Davidson presently has a consensus target price of $27.44, suggesting a potential downside of 0.44%. Given Harley-Davidson’s higher possible upside, research analysts clearly believe Harley-Davidson is more favorable than Mercedes-Benz Group.

Dividends

Harley-Davidson pays an annual dividend of $0.75 per share and has a dividend yield of 2.7%. Mercedes-Benz Group pays an annual dividend of C$0.69 per share and has a dividend yield of 5.1%. Harley-Davidson pays out 46.0% of its earnings in the form of a dividend. Mercedes-Benz Group pays out 44.5% 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. Harley-Davidson has increased its dividend for 5 consecutive years. Mercedes-Benz Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Harley-Davidson beats Mercedes-Benz Group on 12 of the 18 factors compared between the two stocks.

About Harley-Davidson

Harley-Davidson, Inc. manufactures and sells motorcycles in the United States and internationally. The company operates in three segments: Harley-Davidson Motor Company, LiveWire, and Harley-Davidson Financial Services. The Harley-Davidson Motor Company segment designs, manufactures, and sells motorcycles, including cruiser, trike, touring, standard, sportbike, adventure, and dual sport, as well as motorcycle parts, accessories, and apparel, as well as licenses its trademarks and related services. This segment sells its products to retail customers through a network of independent dealers, as well as e-commerce channels. The LiveWire segment sells electric motorcycles, balance bikes for kids, parts and accessories, apparel, and related parts and services. The Harley-Davidson Financial Services segment provides wholesale financing services, such as floorplan and open account financing of motorcycles, and parts and accessories; and retail financing services, such as installment lending for the purchase of new and used Harley-Davidson motorcycles, as well as point-of-sale insurance and voluntary protection products. This segment also licenses third-party financial institutions that issue credit cards bearing the Harley-Davidson brand. Harley-Davidson, Inc. was founded in 1903 and is based in Milwaukee, Wisconsin.

About Mercedes-Benz Group

Mercedes-Benz Group AG operates as an automotive company in Germany and internationally. It operates through Mercedes-Benz Cars, Mercedes-Benz Vans, and Mercedes-Benz Mobility segments. The company develops, manufactures, and sells cars and vans under the Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach, G-Class brands, as well as related spare parts and accessories. It also provides financing, leasing, car subscription and rental, fleet management, insurance brokerage, and mobility services, as well as digital services for charging and payment. The company was formerly known as Daimler AG and changed its name to Mercedes-Benz Group AG in February 2022. Mercedes-Benz Group AG was founded in 1886 and is headquartered in Stuttgart, Germany.