BRP (NASDAQ:DOOO) vs. Iochpe-Maxion (OTCMKTS:IOCJY) Critical Analysis

BRP (NASDAQ:DOOO) and Iochpe-Maxion (OTCMKTS:IOCJY) are both auto/tires/trucks companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for BRP and Iochpe-Maxion, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BRP	0	4	8	2	2.86
Iochpe-Maxion	0	1	0	0	2.00

BRP currently has a consensus target price of $94.75, indicating a potential upside of 63.79%. Given BRP’s stronger consensus rating and higher possible upside, research analysts plainly believe BRP is more favorable than Iochpe-Maxion.

Dividends

BRP pays an annual dividend of $0.61 per share and has a dividend yield of 1.1%. Iochpe-Maxion pays an annual dividend of $0.01 per share and has a dividend yield of 1.9%. BRP pays out 164.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Iochpe-Maxion pays out 33.3% of its earnings in the form of a dividend. BRP has raised its dividend for 2 consecutive years. Iochpe-Maxion is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares BRP and Iochpe-Maxion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BRP	0.45%	67.30%	4.72%
Iochpe-Maxion	0.63%	2.04%	0.66%

Risk and Volatility

BRP has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500. Comparatively, Iochpe-Maxion has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Earnings & Valuation

This table compares BRP and Iochpe-Maxion”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BRP	$8.03 billion	0.53	-$154.60 million	$0.37	156.35
Iochpe-Maxion	$2.75 billion	0.09	$17.62 million	$0.03	17.64

Iochpe-Maxion has lower revenue, but higher earnings than BRP. Iochpe-Maxion is trading at a lower price-to-earnings ratio than BRP, indicating that it is currently the more affordable of the two stocks.

Summary

BRP beats Iochpe-Maxion on 12 of the 16 factors compared between the two stocks.

About BRP

BRP Inc., together with its subsidiaries, designs, develops, manufactures, distributes, and markets powersports vehicles and marine products in the United States, Canada, Europe, the Asia Pacific, Mexico, Austria, and internationally. The Powersports segment offers year-round products, such as Can-Am all-terrain vehicles, side-by-side vehicles, and three-wheeled vehicles; and seasonal products, including Ski-Doo and Lynx snowmobiles, Sea-Doo personal watercrafts and pontoons, Rotax engines for karts and recreational aircraft, and Pinion gearboxes with smart shift systems. The Marine segment provides Alumacraft, Manitou, Quintrex, Stacer, and Yellowfin boats; Rotax engines for jet boats; and Rotax S outboard engine. The company was formerly known as J.A. Bombardier (J.A.B.) Inc. and changed its name to BRP Inc. in April 2013. BRP Inc. was founded in 1937 and is headquartered in Valcourt, Canada.

About Iochpe-Maxion

Iochpe-Maxion S.A. produces and sells automotive wheels and structural components for commercial and light vehicles in North America, South America, Europe, Asia, and internationally. It operates in two divisions, Maxion Wheels and Maxion Structural Components. The company offers heavy steel wheels; light steel wheels for automobiles, pick-ups, and SUVs, as well as light and medium commercial vehicles; wheels for agricultural machinery; and light aluminum wheels for automobiles. It also provides heavy structural components, including frames, side members, and cross members. In addition, the company offers light and automotive structural components, such as stampings for passenger vehicles, handbrake levers, pedal and welded assemblies, structural parts, and other automotive components. Further, it produces railway wheels, freight cars, and castings, as well as industrial castings. The company was founded in 1918 and is headquartered in Cruzeiro, Brazil.