Head to Head Contrast: KAR Auction Services (KAR) & Rush Enterprises (RUSHA)

KAR Auction Services (NYSE: KAR) and Rush Enterprises (NASDAQ:RUSHA) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.

Earnings and Valuation

This table compares KAR Auction Services and Rush Enterprises’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KAR Auction Services $3.46 billion 2.15 $362.00 million $2.50 22.06
Rush Enterprises $4.71 billion 0.39 $172.12 million $2.29 19.91



KAR Auction Services has higher earnings, but lower revenue than Rush Enterprises. Rush Enterprises is trading at a lower price-to-earnings ratio than KAR Auction Services, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and target prices for KAR Auction Services and Rush Enterprises, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KAR Auction Services 0 2 7 0 2.78
Rush Enterprises 0 2 5 0 2.71

KAR Auction Services presently has a consensus price target of $58.63, indicating a potential upside of 6.28%. Rush Enterprises has a consensus price target of $51.67, indicating a potential upside of 13.33%. Given Rush Enterprises’ higher probable upside, analysts plainly believe Rush Enterprises is more favorable than KAR Auction Services.

Institutional and Insider Ownership

99.5% of KAR Auction Services shares are owned by institutional investors. Comparatively, 76.6% of Rush Enterprises shares are owned by institutional investors. 1.3% of KAR Auction Services shares are owned by company insiders. Comparatively, 11.2% of Rush Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares KAR Auction Services and Rush Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KAR Auction Services 10.81% 24.93% 5.22%
Rush Enterprises 3.64% 11.09% 3.85%

Volatility and Risk

KAR Auction Services has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, Rush Enterprises has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500.

Dividends

KAR Auction Services pays an annual dividend of $1.40 per share and has a dividend yield of 2.5%. Rush Enterprises does not pay a dividend. KAR Auction Services pays out 56.0% of its earnings in the form of a dividend. KAR Auction Services has increased its dividend for 5 consecutive years.

Summary

KAR Auction Services beats Rush Enterprises on 12 of the 17 factors compared between the two stocks.

About KAR Auction Services

KAR Auction Services, Inc., together with its subsidiaries, provides used car auction and salvage auction services in the United States, Canada, Mexico, and the United Kingdom. The company operates through three segments: ADESA Auctions, IAA, and AFC. The ADESA Auctions segment offers whole car auctions and related services to the vehicle remarketing industry through online auctions and auction facilities. It also provides value-added services, such as auction related, transportation, reconditioning, inspection, title and repossession administration and remarketing, vehicle research, and analytical services, as well as data. This segment sells its products and services through vehicle manufacturers, fleet companies, rental car companies, finance companies, and others. The IAA segment offers various loss solutions and salvage vehicle auction services that facilitate the remarketing of vehicles for a range of sellers, including insurance companies, dealerships, rental car companies, fleet lease companies, and charitable organizations. This segment also provides catastrophe, vehicle inspection center, and transportation and towing services. The AFC segment offers floorplan financing, a short-term inventory-secured financing, to independent used vehicle dealers. As of December 31, 2017, the company had a network of 75 whole car auction locations and 175 salvage auction sites. The company was formerly known as KAR Holdings, Inc. and changed its name to KAR Auction Services, Inc. in November 2009. KAR Auction Services, Inc. was founded in 2006 and is headquartered in Carmel, Indiana.

About Rush Enterprises

Rush Enterprises, Inc., through its subsidiaries, operates as an integrated retailer of commercial vehicles and related services in the United States. The company operates a network of commercial vehicle dealerships under the Rush Truck Centers name. Its Rush Truck Centers primarily sell commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, Mitsubishi Fuso, IC Bus, or Blue Bird; provides new and used commercial vehicles, and aftermarket parts, as well as service and repair, financing, and leasing and rental services; and offers property and casualty insurance, including collision and liability insurance on commercial vehicles, cargo insurance, and credit life insurance to its commercial vehicle customers. The company also offers equipment installation and repair, parts installation, and paint and body repair services; new vehicle pre-delivery inspection, truck modification, and natural gas fuel system installation services; and body, chassis upfit, and component installation services, as well as sells tires for use on commercial vehicles. It serves regional and national truck fleets, corporations, local governments, and owner operators. The company operates a network of centers located in the states of Alabama, Arizona, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Missouri, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Tennessee, Texas, Utah, and Virginia. Rush Enterprises, Inc. was founded in 1965 and is headquartered in New Braunfels, Texas.

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