LCI Industries (NYSE: LCII) and Thor Industries (NYSE:THO) are both mid-cap cyclical consumer goods & services companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, dividends, profitability, risk, earnings, analyst recommendations and institutional ownership.

Profitability

This table compares LCI Industries and Thor Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LCI Industries 7.07% 23.60% 16.10%
Thor Industries 5.46% 27.76% 16.46%

Dividends

LCI Industries pays an annual dividend of $2.20 per share and has a dividend yield of 1.7%. Thor Industries pays an annual dividend of $1.48 per share and has a dividend yield of 1.0%. LCI Industries pays out 39.2% of its earnings in the form of a dividend. Thor Industries pays out 18.4% 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. Thor Industries has increased its dividend for 7 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for LCI Industries and Thor Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LCI Industries 1 0 3 0 2.50
Thor Industries 1 4 7 0 2.50

LCI Industries currently has a consensus target price of $123.00, indicating a potential downside of 4.65%. Thor Industries has a consensus target price of $123.91, indicating a potential downside of 19.38%. Given LCI Industries’ higher probable upside, analysts clearly believe LCI Industries is more favorable than Thor Industries.

Insider & Institutional Ownership

97.7% of LCI Industries shares are owned by institutional investors. Comparatively, 88.3% of Thor Industries shares are owned by institutional investors. 3.6% of LCI Industries shares are owned by insiders. Comparatively, 5.1% of Thor Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares LCI Industries and Thor Industries’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LCI Industries $1.68 billion 1.92 $129.67 million $5.61 22.99
Thor Industries $7.25 billion 1.12 $374.25 million $8.03 19.14

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

Risk & Volatility

LCI Industries has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500. Comparatively, Thor Industries has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Summary

Thor Industries beats LCI Industries on 10 of the 16 factors compared between the two stocks.

LCI Industries Company Profile

LCI Industries, formerly Drew Industries Incorporated, through its subsidiary, Lippert Components, Inc. and its subsidiaries (LCI), supplies an array of components for the original equipment manufacturers (OEMs) of recreational vehicles (RVs) and adjacent industries. The Company’s segments include OEM Segment and Aftermarket Segment. The OEM Segment manufactures or distributes an array of components for the OEMs of RVs and adjacent industries, including buses; trailers used to haul boats, livestock, equipment and other cargo; pontoon boats; manufactured homes; modular housing, and mobile office units. The Aftermarket Segment supplies components to the related aftermarket channels of the RV and adjacent industries, primarily to retail dealers, wholesale distributors and service centers. The Aftermarket Segment also includes the sale of replacement glass and awnings to fulfill insurance claims.

Thor Industries Company Profile

Thor Industries, Inc. manufactures a range of recreational vehicles (RVs) in the United States and sells those vehicles primarily in the United States and Canada. The Company’s segments include towable recreational vehicles, which consists of the operations of Airstream, Inc. (Airstream) (towable); Heartland Recreational Vehicles, LLC (Heartland) (including Bison Coach, LLC (Bison), Cruiser RV, LLC (CRV) and DRV, LLC (DRV)); Jayco, Corp. (Jayco) (including Jayco towable, Starcraft and Highland Ridge), Keystone RV Company (Keystone) (including CrossRoads and Dutchmen) and K.Z., Inc. (KZ) (including Livin’ Lite RV, Inc. (Livin’ Lite)); motorized recreational vehicles, which consists of the operations of Airstream (motorized), Jayco (including Jayco motorized and Entegra Coach) and Thor Motor Coach, Inc. (Thor Motor Coach), and Other, which includes the operations of its subsidiary, Postle Operating, LLC (Postle).

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