Reviewing Custom Truck One Source (NYSE:CTOS) and American Axle & Manufacturing (NYSE:AXL)

Custom Truck One Source (NYSE:CTOS) and American Axle & Manufacturing (NYSE:AXL) are both small-cap auto/tires/trucks companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, earnings, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of recent ratings for Custom Truck One Source and American Axle & Manufacturing, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Custom Truck One Source	1	2	2	0	2.20
American Axle & Manufacturing	0	4	3	0	2.43

Custom Truck One Source presently has a consensus target price of $6.38, indicating a potential upside of 9.07%. American Axle & Manufacturing has a consensus target price of $6.75, indicating a potential upside of 11.75%. Given American Axle & Manufacturing’s stronger consensus rating and higher possible upside, analysts clearly believe American Axle & Manufacturing is more favorable than Custom Truck One Source.

Risk and Volatility

Custom Truck One Source has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, American Axle & Manufacturing has a beta of 1.61, indicating that its share price is 61% more volatile than the S&P 500.

Earnings & Valuation

This table compares Custom Truck One Source and American Axle & Manufacturing”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Custom Truck One Source	$1.80 billion	0.73	-$28.66 million	($0.16)	-36.53
American Axle & Manufacturing	$5.83 billion	0.12	$33.80 million	$0.34	17.76

American Axle & Manufacturing has higher revenue and earnings than Custom Truck One Source. Custom Truck One Source is trading at a lower price-to-earnings ratio than American Axle & Manufacturing, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Custom Truck One Source and American Axle & Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Custom Truck One Source	-1.89%	-6.61%	-1.54%
American Axle & Manufacturing	0.73%	8.90%	1.05%

Insider and Institutional Ownership

90.1% of Custom Truck One Source shares are owned by institutional investors. Comparatively, 91.4% of American Axle & Manufacturing shares are owned by institutional investors. 4.5% of Custom Truck One Source shares are owned by company insiders. Comparatively, 2.1% of American Axle & Manufacturing shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

American Axle & Manufacturing beats Custom Truck One Source on 12 of the 14 factors compared between the two stocks.

About Custom Truck One Source

Custom Truck One Source, Inc. provides specialty equipment rental and sale services to the electric utility transmission and distribution, telecommunications, rail, forestry, waste management, and other infrastructure-related industries in the United States and Canada. The company operates through three segments: Equipment Rental Solutions (ERS), Truck and Equipment Sales (TES), and Aftermarket Parts and Services (APS). The ERS segment owns new and used specialty equipment, including truck-mounted aerial lifts, cranes, service trucks, dump trucks, trailers, digger derricks, and other machinery and equipment. The TES segment offers new equipment for sale to be used for end-markets, which can be modified to meet customers specific needs. The APS segment provides truck and equipment maintenance and repair services; and rents and sells specialized tools, including stringing blocks, insulated hot stick, and rigging equipment, as well as sale of specialized aftermarket parts. The company was formerly known as Nesco Holdings, Inc. and changed its name to Custom Truck One Source, Inc. in April 2021. Custom Truck One Source, Inc. was founded in 1988 and is headquartered in Kansas City, Missouri.

About American Axle & Manufacturing

American Axle & Manufacturing Holdings, Inc. engages in the manufacture, engineering, design, and validation of driveline systems and related components. It operates through the Driveline and Metal Forming segments. The Driveline segment consists of axles, drive shafts, power transfer units, rear drive modules, and electric and hybrid driveline products and systems for light trucks, service utility vehicles, crossover vehicles, passenger cars, and commercial vehicles. The Metal Forming segment manufactures axle shafts, ring and pinion gears, differential gears, transmission gears, and shafts and suspension components for original equipment manufacturers (OEMs), and Tier 1 automotive suppliers. The company was founded by Richard E. Dauch on March 1, 1994, and is headquartered in Detroit, MI.