Head-To-Head Review: Polaris (NYSE:PII) versus Blue Bird (NASDAQ:BLBD)

Blue Bird (NASDAQ:BLBD) and Polaris (NYSE:PII) are both auto/tires/trucks companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Profitability

This table compares Blue Bird and Polaris’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blue Bird	8.65%	57.60%	22.66%
Polaris	-6.51%	-0.05%	-0.01%

Institutional and Insider Ownership

93.6% of Blue Bird shares are owned by institutional investors. Comparatively, 88.1% of Polaris shares are owned by institutional investors. 1.1% of Blue Bird shares are owned by insiders. Comparatively, 3.1% of Polaris shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Blue Bird has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500. Comparatively, Polaris has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Blue Bird and Polaris, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blue Bird	0	1	6	0	2.86
Polaris	1	11	0	0	1.92

Blue Bird currently has a consensus price target of $67.20, suggesting a potential upside of 24.79%. Polaris has a consensus price target of $59.80, suggesting a potential upside of 14.95%. Given Blue Bird’s stronger consensus rating and higher possible upside, equities analysts clearly believe Blue Bird is more favorable than Polaris.

Valuation & Earnings

This table compares Blue Bird and Polaris”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blue Bird	$1.48 billion	1.15	$127.72 million	$3.96	13.60
Polaris	$7.15 billion	0.41	-$465.50 million	($8.18)	-6.36

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

Summary

Blue Bird beats Polaris on 12 of the 14 factors compared between the two stocks.

About Blue Bird

Blue Bird Corporation, together with its subsidiaries, designs, engineers, manufactures, and sells school buses in the United States, Canada, and internationally. The company operates through two segments, Bus and Parts. It offers Type C, Type D, and specialty buses; and alternative power options through its propane powered, gasoline powered, compressed natural gas powered, and electric powered school buses, as well as diesel engines. The company also sells replacement bus parts; and provides financing services and extended warranties related to its products. Blue Bird Corporation sells its products through drop ship and a network of dealers, as well as directly to fleet operators, the United States government, and state governments; independent service centers; and maintains a parts distribution center. Blue Bird Corporation was founded in 1927 and is headquartered in Macon, Georgia.

About Polaris

Polaris Inc. designs, engineers, manufactures, and markets powersports vehicles in the United States, Canada, and internationally. It operates through three segments: Off-Road, On-Road, and Marine. The company offers off-road vehicles (ORVs), including all-terrain vehicles and side-by-side vehicles; military and commercial ORVs; snowmobiles; motorcycles; and moto-roadsters, quadricycles, and boats. It also provides ORV accessories comprising winches, bumper/brushguards, plows, racks, wheels and tires, pull-behinds, cab systems, lighting and audio systems, cargo box accessories, tracks, and oil; snowmobile accessories, which include covers, traction products, reverse kits, electric starters, tracks, bags, windshields, oil, and lubricants; and motorcycle accessories, such as saddle bags, handlebars, backrests, exhausts, windshields, seats, oil, and various chrome accessories. In addition, the company offers light duty hauling and passenger vehicles; gear and apparel, such as helmets, goggles, jackets, gloves, boots, bibs, hats, pants, and leathers; and pontoon and deck boats. The company provides its products through dealers and distributors, and online; and retail and e-commerce marketplaces. The company was formerly known as Polaris Industries Inc. Polaris Inc. was founded in 1945 and is headquartered in Medina, Minnesota.