Critical Analysis: CNH Industrial (NYSE:CNH) and ATS (NYSE:ATS)

ATS (NYSE:ATS) and CNH Industrial (NYSE:CNH) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.

Profitability

This table compares ATS and CNH Industrial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ATS	1.60%	8.96%	3.63%
CNH Industrial	1.71%	6.78%	1.24%

Institutional & Insider Ownership

75.8% of ATS shares are held by institutional investors. Comparatively, 59.9% of CNH Industrial shares are held by institutional investors. 0.2% of CNH Industrial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

ATS has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, CNH Industrial has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for ATS and CNH Industrial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ATS	1	3	3	0	2.29
CNH Industrial	2	5	8	0	2.40

ATS presently has a consensus price target of $42.50, suggesting a potential upside of 119.30%. CNH Industrial has a consensus price target of $13.10, suggesting a potential downside of 2.93%. Given ATS’s higher probable upside, analysts plainly believe ATS is more favorable than CNH Industrial.

Earnings and Valuation

This table compares ATS and CNH Industrial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ATS	$2.15 billion	0.88	$51.85 million	$0.34	57.00
CNH Industrial	$18.09 billion	0.92	$510.00 million	$0.25	53.98

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

Summary

CNH Industrial beats ATS on 7 of the 13 factors compared between the two stocks.

About ATS

ATS Corporation, together with its subsidiaries, provides automation solutions worldwide. The company is also involved in planning, designing, building, commissioning, and servicing automated manufacturing and assembly systems, including automation products and test solutions. In addition, it offers pre-automation services comprising discovery and analysis, concept development, simulation, and total cost of ownership modelling; post automation services, including training, process optimization, preventative maintenance, emergency and on-call support, spare parts, retooling, retrofits, and equipment relocation; and contract manufacturing services, as well as after sales and services. Further, the company provides engineering design, prototyping, process verification, specification writing, software and manufacturing process controls development, standard automation products/platforms, equipment design and build, third-party equipment qualification, procurement and integration, automation system installation, product line commissioning, validation, and documentation services. Additionally, it offers value engineering, supply chain management, and integration and manufacturing capabilities, as well as other automation products and solutions; and software and digital solutions comprising connected factory floor management systems to capture, analyze, and use real time machine performance data to troubleshoot, deliver process and product solutions, prevent equipment downtime, drive operational efficiency, and unlock performance for sustainable production improvements. ATS Corporation serves life sciences, transportation and mobility, consumer products, food and beverage, electronics, nuclear, packaging, warehousing and distribution, and energy markets. The company was formerly known as ATS Automation Tooling Systems Inc. and changed its name to ATS Corporation in November 2022. ATS Corporation was founded in 1978 and is headquartered in Cambridge, Canada.

About CNH Industrial

CNH Industrial NV is an equipment and services company, which develops, manufactures and sells specialized machines and services for the farming and construction industries, and supplies replacement parts and accessories. It operates through the following operating segments: Agriculture, Construction, and Financial Services. The Agriculture segment designs, manufactures, and distributes a full line of farm machinery and implements, including two-wheel and four-wheel drive tractors, crawler tractors, combines, grape and sugar cane harvesters, hay and forage equipment, planting and seeding equipment, soil preparation and cultivation implements and material handling equipment. The Construction segment comprises of a full line of construction equipment including excavators, crawler dozers, graders, wheel loaders, backhoe loaders, skid steer loaders, and compact track loaders. The Financial Services segment offers retail note and lease financing to end-use customers for the purchase of new and used agricultural and construction equipment and components. The company was founded in 1866 and is headquartered in London, the United Kingdom.