Contrasting CNH Industrial (NYSE:CNH) and RBC Bearings (NYSE:RBC)

RBC Bearings (NYSE:RBC) and CNH Industrial (NYSE:CNH) are both large-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Profitability

This table compares RBC Bearings and CNH Industrial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RBC Bearings	16.40%	12.06%	7.78%
CNH Industrial	1.71%	6.78%	1.24%

Institutional & Insider Ownership

59.9% of CNH Industrial shares are held by institutional investors. 1.8% of RBC Bearings shares are held by company insiders. Comparatively, 0.2% of CNH Industrial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

RBC Bearings has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500. Comparatively, CNH Industrial has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for RBC Bearings and CNH Industrial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RBC Bearings	0	2	7	1	2.90
CNH Industrial	2	5	8	0	2.40

RBC Bearings presently has a consensus target price of $615.44, indicating a potential upside of 22.90%. CNH Industrial has a consensus target price of $13.10, indicating a potential downside of 4.76%. Given RBC Bearings’ stronger consensus rating and higher probable upside, research analysts plainly believe RBC Bearings is more favorable than CNH Industrial.

Valuation & Earnings

This table compares RBC Bearings and CNH Industrial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RBC Bearings	$1.87 billion	8.47	$287.60 million	$10.12	49.48
CNH Industrial	$18.09 billion	0.94	$510.00 million	$0.25	55.02

CNH Industrial has higher revenue and earnings than RBC Bearings. RBC Bearings is trading at a lower price-to-earnings ratio than CNH Industrial, indicating that it is currently the more affordable of the two stocks.

Summary

RBC Bearings beats CNH Industrial on 10 of the 15 factors compared between the two stocks.

About RBC Bearings

RBC Bearings Incorporated manufactures and markets engineered precision bearings, components, and systems in the United States and internationally. It operates through two segments, Aerospace/Defense and Industrial. The company produces plain bearings with self-lubricating or metal-to-metal designs, including rod end bearings, spherical plain bearings, and journal bearings; roller bearings, such as tapered roller bearings, needle roller bearings, and needle bearing track rollers and cam followers, which are anti-friction products that are used in industrial applications and military aircraft platforms; and ball bearings include high precision aerospace, airframe control, thin section, and industrial ball bearings that utilize high precision ball elements to reduce friction in high-speed applications. In addition, it offers mounted bearing products include mounted ball bearings, mounted roller bearings, and mounted plain bearings; and enclosed gearing product lines, including quantis gearmotor, torque arm, tigear, magnagear and maxum, and controlled start transmission. Further, the company's power transmission components include mechanical drive components, couplings, and conveyor components; engineered hydraulics and valves for aircraft and submarine applications, and aerospace and defense aftermarket services; fasteners; precision mechanical components, which are used in various general industrial applications; and machine tool collets that are used for holding circulars or rod-like pieces. It serves automotive, tool holding, agricultural and semiconductor machinery, commercial and defense aerospace, ground defense, construction and mining, oil and natural resource extraction, heavy truck, marine, rail and train, material handling, food and beverage, packaging and canning, wind, and general industrial markets through its direct sales force, and a network of industrial and aerospace distributors. The company was founded in 1919 and is based in Oxford, Connecticut.

About CNH Industrial

CNH Industrial NV is an equipment and services company, which develops, manufactures and sells specialized machines and services for the farming and construction industries, and supplies replacement parts and accessories. It operates through the following operating segments: Agriculture, Construction, and Financial Services. The Agriculture segment designs, manufactures, and distributes a full line of farm machinery and implements, including two-wheel and four-wheel drive tractors, crawler tractors, combines, grape and sugar cane harvesters, hay and forage equipment, planting and seeding equipment, soil preparation and cultivation implements and material handling equipment. The Construction segment comprises of a full line of construction equipment including excavators, crawler dozers, graders, wheel loaders, backhoe loaders, skid steer loaders, and compact track loaders. The Financial Services segment offers retail note and lease financing to end-use customers for the purchase of new and used agricultural and construction equipment and components. The company was founded in 1866 and is headquartered in London, the United Kingdom.