Analyzing Lithia Motors (NYSE:LAD) and Titan Machinery (NASDAQ:TITN)

Lithia Motors (NYSE:LAD) and Titan Machinery (NASDAQ:TITN) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.

Valuation and Earnings

This table compares Lithia Motors and Titan Machinery”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lithia Motors	$37.16 billion	0.22	$802.00 million	$33.73	9.60
Titan Machinery	$2.70 billion	0.17	-$36.91 million	($2.63)	-7.76

Lithia Motors has higher revenue and earnings than Titan Machinery. Titan Machinery is trading at a lower price-to-earnings ratio than Lithia Motors, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Lithia Motors and Titan Machinery’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lithia Motors	2.39%	13.21%	3.81%
Titan Machinery	-2.23%	-8.22%	-2.64%

Insider and Institutional Ownership

78.4% of Titan Machinery shares are held by institutional investors. 0.9% of Lithia Motors shares are held by company insiders. Comparatively, 10.8% of Titan Machinery shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Lithia Motors has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, Titan Machinery has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Lithia Motors and Titan Machinery, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lithia Motors	0	3	7	0	2.70
Titan Machinery	0	2	2	2	3.00

Lithia Motors currently has a consensus target price of $379.00, suggesting a potential upside of 17.01%. Titan Machinery has a consensus target price of $22.25, suggesting a potential upside of 8.96%. Given Lithia Motors’ higher possible upside, research analysts plainly believe Lithia Motors is more favorable than Titan Machinery.

Summary

Lithia Motors beats Titan Machinery on 10 of the 15 factors compared between the two stocks.

About Lithia Motors

Lithia Motors, Inc. operates as an automotive retailer worldwide. It operates in two segments, Vehicle Operations and Financing Operations. The company’s Vehicle Operations segment sells new and used vehicles; provides parts, repair, and maintenance services; vehicle finance; and insurance products. Its Financing Operations segment provides financing to customers buying and leasing retail vehicles. The company sells its products and services through the Driveway and Greencars brand names through a network of locations, e-commerce platforms, and captive finance solutions. Lithia Motors, Inc. was founded in 1946 and is headquartered in Medford, Oregon.

About Titan Machinery

Titan Machinery Inc. owns and operates a network of full service agricultural and construction equipment stores in the United States, Europe, and Australia. It operates through four segments: Agriculture, Construction, Europe, and Australia. The company sells new and used equipment, including agricultural and construction equipment manufactured under the CNH Industrial family of brands, as well as equipment from various other manufacturers. Its agricultural equipment includes machinery and attachments for use in the production of food, fiber, feed grain, feed stock, and renewable energy; and home and garden applications, as well as maintenance of commercial, residential, and government properties. The company’s construction equipment comprises heavy construction machinery, light industrial machinery for commercial and residential construction, and road and highway construction machinery. It also sells maintenance and replacement parts. In addition, the company offers repair and maintenance services that include warranty repairs, off-site and on-site repair services, scheduling off-season maintenance services, and notifying customers of periodic service requirements; and training programs to customers. Further, it rents equipment; and provides ancillary equipment support services, such as equipment transportation, global positioning system signal subscriptions and other precision farming products, farm data management products, and CNH Industrial finance and insurance products. The company operates in Colorado, Idaho, Kansas, Missouri, Washington, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin, and Wyoming, the United States; Bulgaria, Germany, Romania, and Ukraine, Europe; and New South Wales, South Australia, and Victoria, Australia. Titan Machinery Inc. was founded in 1980 and is headquartered in West Fargo, North Dakota.