Reviewing Ferrari (NYSE:RACE) and Harley-Davidson (NYSE:HOG)

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

Valuation and Earnings

This table compares Harley-Davidson and Ferrari”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Harley-Davidson	$4.47 billion	0.57	$338.74 million	$1.63	15.07
Ferrari	$8.08 billion	11.23	$1.81 billion	$10.77	36.03

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Harley-Davidson and Ferrari, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Harley-Davidson	2	5	4	1	2.33
Ferrari	0	6	9	3	2.83

Harley-Davidson currently has a consensus target price of $27.44, suggesting a potential upside of 11.70%. Ferrari has a consensus target price of $479.27, suggesting a potential upside of 23.51%. Given Ferrari’s stronger consensus rating and higher possible upside, analysts plainly believe Ferrari is more favorable than Harley-Davidson.

Institutional & Insider Ownership

85.1% of Harley-Davidson shares are held by institutional investors. 1.0% of Harley-Davidson shares are held by company 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.

Profitability

This table compares Harley-Davidson and Ferrari’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%
Ferrari	22.29%	42.83%	16.68%

Risk & Volatility

Harley-Davidson has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, Ferrari has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Summary

Ferrari beats Harley-Davidson on 12 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 Ferrari

Ferrari N.V., through its subsidiaries, engages in design, engineering, production, and sale of luxury performance sports cars worldwide. The company offers range, special series, Icona, and supercars; limited edition supercars and one-off cars; and track cars. It also provides racing cars, and spare parts and engines, as well as after sales, repair, maintenance, and restoration services for cars; and licenses its Ferrari brand to various producers and retailers of luxury and lifestyle goods. In addition, the company operates Ferrari museums in Modena and Maranello; Il Cavallino restaurant in Maranello; and theme parks in Abu Dhabi and Spain. Further, it provides direct or indirect finance and leasing services to retail clients and dealers; manages racetracks; develops and sells a range of apparel and accessories; and operates franchised and owned Ferrari stores. The company also sells its products through a network of authorized dealers operating points of sale, as well as through its website. The company was founded in 1947 and is headquartered in Maranello, Italy.