Contrasting PACCAR (NASDAQ:PCAR) & MAZDA Mtr Corp/ADR (MZDAY)

MAZDA Mtr Corp/ADR (OTCMKTS:MZDAY) and PACCAR (NASDAQ:PCAR) are both auto/tires/trucks companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Risk & Volatility

MAZDA Mtr Corp/ADR has a beta of -0.08, meaning that its share price is 108% less volatile than the S&P 500. Comparatively, PACCAR has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Valuation and Earnings

This table compares MAZDA Mtr Corp/ADR and PACCAR’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MAZDA Mtr Corp/ADR $31.37 billion 0.22 $1.06 billion $0.94 6.22
PACCAR $19.46 billion 1.23 $1.68 billion $4.26 15.99

PACCAR has lower revenue, but higher earnings than MAZDA Mtr Corp/ADR. MAZDA Mtr Corp/ADR is trading at a lower price-to-earnings ratio than PACCAR, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

0.1% of MAZDA Mtr Corp/ADR shares are held by institutional investors. Comparatively, 61.1% of PACCAR shares are held by institutional investors. 2.6% of PACCAR 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.

Profitability

This table compares MAZDA Mtr Corp/ADR and PACCAR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MAZDA Mtr Corp/ADR 2.71% 9.01% 3.98%
PACCAR 9.39% 22.68% 8.00%

Dividends

MAZDA Mtr Corp/ADR pays an annual dividend of $0.06 per share and has a dividend yield of 1.0%. PACCAR pays an annual dividend of $1.12 per share and has a dividend yield of 1.6%. MAZDA Mtr Corp/ADR pays out 6.4% of its earnings in the form of a dividend. PACCAR pays out 26.3% 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. PACCAR has increased its dividend for 8 consecutive years. PACCAR is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and target prices for MAZDA Mtr Corp/ADR and PACCAR, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MAZDA Mtr Corp/ADR 2 0 0 0 1.00
PACCAR 4 15 5 0 2.04

PACCAR has a consensus price target of $71.77, suggesting a potential upside of 5.34%. Given PACCAR’s stronger consensus rating and higher possible upside, analysts clearly believe PACCAR is more favorable than MAZDA Mtr Corp/ADR.

Summary

PACCAR beats MAZDA Mtr Corp/ADR on 15 of the 17 factors compared between the two stocks.

MAZDA Mtr Corp/ADR Company Profile

Mazda Motor Corporation manufactures and sells passenger cars and commercial vehicles in Japan, North America, Europe, China, and internationally. Its principal products include four-wheeled vehicles, gasoline reciprocating engines, diesel engines, and automatic and manual transmissions for vehicles. The company was formerly known as Toyo Kogyo Co., Ltd. and changed its name to Mazda Motor Corporation in May 1984. Mazda Motor Corporation was founded in 1920 and is headquartered in Hiroshima, Japan.

PACCAR Company Profile

PACCAR Inc designs, manufactures, and distributes light, medium, and heavy-duty commercial trucks in the United States, Europe, and internationally. It operates in three segments: Truck, Parts, and Financial Services. The Truck segment offers trucks that are used for the over-the-road and off-highway hauling of commercial and consumer goods. This segment sells its trucks through a network of independent dealers under the Kenworth, Peterbilt, and DAF nameplates. The Parts segment distributes aftermarket parts for trucks and related commercial vehicles. The Financial Services segment conducts full service leasing operations under the PacLease trade name. This segment also provides equipment financing and administrative support services for its franchisees; retail loan and leasing services for small, medium, and large commercial trucking companies, as well as independent owner/operators and other businesses; and truck inventory financing services to independent dealers. In addition, it offers loans and leases directly to customers for the acquisition of trucks and related equipment. The company also manufactures and sells industrial winches under the Braden, Carco, and Gearmatic nameplates. PACCAR Inc was founded in 1905 and is headquartered in Bellevue, Washington.

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