Critical Comparison: NIO (NYSE:NIO) & Harley-Davidson (NYSE:HOG)

Harley-Davidson (NYSE:HOG) and NIO (NYSE:NIO) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, valuation and institutional ownership.

Risk and Volatility

Harley-Davidson has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, NIO has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Harley-Davidson and NIO, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Harley-Davidson	2	5	4	1	2.33
NIO	2	8	6	0	2.25

Harley-Davidson currently has a consensus price target of $27.44, suggesting a potential downside of 1.28%. NIO has a consensus price target of $6.21, suggesting a potential upside of 68.50%. Given NIO’s higher possible upside, analysts clearly believe NIO is more favorable than Harley-Davidson.

Institutional & Insider Ownership

85.1% of Harley-Davidson shares are owned by institutional investors. Comparatively, 48.5% of NIO shares are owned by institutional investors. 1.0% of Harley-Davidson shares are owned by insiders. Comparatively, 1.0% of NIO shares are owned by 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 Harley-Davidson and NIO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Harley-Davidson	4.78%	6.28%	2.45%
NIO	-3.95%	-111.37%	-3.62%

Valuation and Earnings

This table compares Harley-Davidson and NIO”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Harley-Davidson	$4.47 billion	0.65	$338.74 million	$1.63	17.06
NIO	$114.11 billion	0.08	-$2.14 billion	($0.27)	-13.65

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

Summary

Harley-Davidson beats NIO on 11 of the 15 factors compared between the two stocks.

About Harley-Davidson

Harley-Davidson, Inc. manufactures and sells motorcycles in the United States and internationally. The company operates in three segments: Harley-Davidson Motor Company, LiveWire, and Harley-Davidson Financial Services. The Harley-Davidson Motor Company segment designs, manufactures, and sells motorcycles, including cruiser, trike, touring, standard, sportbike, adventure, and dual sport, as well as motorcycle parts, accessories, and apparel, as well as licenses its trademarks and related services. This segment sells its products to retail customers through a network of independent dealers, as well as e-commerce channels. The LiveWire segment sells electric motorcycles, balance bikes for kids, parts and accessories, apparel, and related parts and services. The Harley-Davidson Financial Services segment provides wholesale financing services, such as floorplan and open account financing of motorcycles, and parts and accessories; and retail financing services, such as installment lending for the purchase of new and used Harley-Davidson motorcycles, as well as point-of-sale insurance and voluntary protection products. This segment also licenses third-party financial institutions that issue credit cards bearing the Harley-Davidson brand. Harley-Davidson, Inc. was founded in 1903 and is based in Milwaukee, Wisconsin.

About NIO

NIO Inc. designs, manufactures, and sells electric vehicles in the People's Republic of China. The company is also involved in the manufacture of e-powertrain, battery packs, and components; and racing management, technology development, and sales and after-sales management activities. In addition, it offers power solutions for battery charging needs; and other value-added services. The company was formerly known as NextEV Inc. and changed its name to NIO Inc. in July 2017. NIO Inc. was founded in 2014 and is headquartered in Shanghai, the People's Republic of China.