Financial Analysis: Trinity Industries (NYSE:TRN) and Hyster-Yale (NYSE:HY)

Trinity Industries (NYSE:TRN) and Hyster-Yale (NYSE:HY) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Profitability

This table compares Trinity Industries and Hyster-Yale’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trinity Industries	16.62%	18.51%	2.56%
Hyster-Yale	-3.33%	-21.03%	-4.87%

Analyst Ratings

This is a breakdown of current ratings for Trinity Industries and Hyster-Yale, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinity Industries	0	2	1	0	2.33
Hyster-Yale	1	1	2	0	2.25

Trinity Industries currently has a consensus price target of $35.00, suggesting a potential upside of 23.27%. Hyster-Yale has a consensus price target of $47.50, suggesting a potential upside of 42.44%. Given Hyster-Yale’s higher possible upside, analysts clearly believe Hyster-Yale is more favorable than Trinity Industries.

Dividends

Trinity Industries pays an annual dividend of $1.24 per share and has a dividend yield of 4.4%. Hyster-Yale pays an annual dividend of $1.46 per share and has a dividend yield of 4.4%. Trinity Industries pays out 29.9% of its earnings in the form of a dividend. Hyster-Yale pays out -22.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Trinity Industries has increased its dividend for 16 consecutive years and Hyster-Yale has increased its dividend for 1 consecutive years. Hyster-Yale is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Trinity Industries and Hyster-Yale”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trinity Industries	$2.16 billion	1.05	$253.10 million	$4.15	6.84
Hyster-Yale	$3.51 billion	0.17	-$60.10 million	($6.56)	-5.08

Trinity Industries has higher earnings, but lower revenue than Hyster-Yale. Hyster-Yale is trading at a lower price-to-earnings ratio than Trinity Industries, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

86.6% of Trinity Industries shares are owned by institutional investors. Comparatively, 46.5% of Hyster-Yale shares are owned by institutional investors. 2.1% of Trinity Industries shares are owned by company insiders. Comparatively, 37.8% of Hyster-Yale shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Trinity Industries has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Hyster-Yale has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500.

Summary

Trinity Industries beats Hyster-Yale on 10 of the 17 factors compared between the two stocks.

About Trinity Industries

Trinity Industries, Inc. provides rail transportation products and services under the TrinityRail name in North America. It operates in two segments, Railcar Leasing and Management Services Group, and Rail Products Group. The Railcar Leasing and Management Services Group segment leases freight and tank railcars; originates and manages railcar leases for third-party investors; and provides fleet maintenance and management services. As of December 31, 2023, it had a fleet of 109,295 railcars. This segment serves industrial shipper and railroad companies operating in agriculture, construction and metals, consumer products, energy, and refined products and chemicals markets. The Rail Products Group segment manufactures freight and tank railcars for transporting various liquids, gases, and dry cargo; and offers railcar maintenance and modification services. This segment serves railroads, leasing companies, and industrial shippers of products in the agriculture, construction and metals, consumer products, energy, and refined products and chemicals markets. It sells or leases products and services through its own sales personnel and independent sales representatives. The company was incorporated in 1933 and is headquartered in Dallas, Texas.

About Hyster-Yale

Hyster-Yale, Inc., through its subsidiaries, designs, engineers, manufactures, sells, and services a line of lift trucks, attachments, and aftermarket parts worldwide. The company manufactures components, such as frames, masts, and transmissions; and assembles lift trucks. It markets its products primarily under the Hyster and Yale brand names to independent Hyster and Yale retail dealerships. The company also sells aftermarket parts under the Hyster and Yale, as well as UNISOURCE and PREMIER brands to Hyster and Yale dealers for the service of competitor lift trucks. In addition, it produces and distributes attachments, forks, and lift tables under the Bolzoni, Auramo, and Meyer brand names; and designs and produces products in the port equipment and rough terrain forklift markets. Further, the company designs, manufactures, and sells hydrogen fuel-cell stacks and engines. It serves light and heavy manufacturers, trucking and automotive companies, rental companies, building materials and paper suppliers, lumber, metal products, warehouses, retailers, food distributors, container handling companies, and U.S. and non-U.S. governmental agencies. The company was formerly known as Hyster-Yale Materials Handling, Inc. and changed its name to Hyster-Yale, Inc. in June 2024. Hyster-Yale, Inc. was incorporated in 1991 and is headquartered in Cleveland, Ohio.