Critical Contrast: Blue Bird (NASDAQ:BLBD) versus Otis Worldwide (NYSE:OTIS)

Otis Worldwide (NYSE:OTIS) and Blue Bird (NASDAQ:BLBD) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Otis Worldwide and Blue Bird, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Otis Worldwide	2	3	4	0	2.22
Blue Bird	1	0	7	1	2.89

Otis Worldwide currently has a consensus target price of $91.00, suggesting a potential upside of 34.37%. Blue Bird has a consensus target price of $85.33, suggesting a potential upside of 51.27%. Given Blue Bird’s stronger consensus rating and higher probable upside, analysts plainly believe Blue Bird is more favorable than Otis Worldwide.

Earnings and Valuation

This table compares Otis Worldwide and Blue Bird”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Otis Worldwide	$14.43 billion	1.79	$1.38 billion	$3.89	17.41
Blue Bird	$1.48 billion	1.19	$127.72 million	$8.22	6.86

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

Volatility and Risk

Otis Worldwide has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Blue Bird has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Institutional & Insider Ownership

88.0% of Otis Worldwide shares are held by institutional investors. Comparatively, 93.6% of Blue Bird shares are held by institutional investors. 0.1% of Otis Worldwide shares are held by company insiders. Comparatively, 1.1% of Blue Bird shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Otis Worldwide and Blue Bird’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Otis Worldwide	10.17%	-28.50%	14.39%
Blue Bird	17.48%	39.97%	18.93%

Summary

Blue Bird beats Otis Worldwide on 11 of the 15 factors compared between the two stocks.

About Otis Worldwide

Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. This segment serves real-estate and building developers, and general contractors. It sells its products directly to customers, as well as through agents and distributors. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. Otis Worldwide Corporation was founded in 1853 and is headquartered in Farmington, Connecticut.

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.