Contrasting THK (OTCMKTS:THKLY) & Trinity Industries (NYSE:TRN)

Trinity Industries (NYSE:TRN) and THK (OTCMKTS:THKLY) are both mid-cap industrials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

Valuation and Earnings

This table compares Trinity Industries and THK”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trinity Industries	$2.16 billion	1.13	$253.10 million	$4.00	7.66
THK	$1.61 billion	2.65	-$468.27 million	$0.30	59.67

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

Risk and Volatility

Trinity Industries has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, THK has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Insider & Institutional Ownership

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

Dividends

Trinity Industries pays an annual dividend of $1.24 per share and has a dividend yield of 4.0%. THK pays an annual dividend of $0.37 per share and has a dividend yield of 2.1%. Trinity Industries pays out 31.0% of its earnings in the form of a dividend. THK pays out 123.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Trinity Industries has raised its dividend for 16 consecutive years. Trinity Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Trinity Industries and THK’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%
THK	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of current ratings for Trinity Industries and THK, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinity Industries	0	3	0	0	2.00
THK	0	1	0	0	2.00

Trinity Industries presently has a consensus target price of $32.00, indicating a potential upside of 4.47%. Given Trinity Industries’ higher probable upside, equities research analysts clearly believe Trinity Industries is more favorable than THK.

Summary

Trinity Industries beats THK on 13 of the 15 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 THK

THK Co., Ltd. engages in the manufacture and sale of mechanical components worldwide. The company provides linear motion (LM) guides, ball screws, ball splines, LM guide actuators, cross roller rings/ double row angular contact ring, electric actuators, linear motor actuators, cam followers, roller followers, linear bushes, LM strokes, slide packs, slide rails, cross roller guides and tables, linear ball slides, LM and flat rollers, spline nuts, screw nuts, change nuts, precision linear packs, link balls, rod ends, spherical plain bearings, lubrication accessories, and seismic isolation products. Its products are used in various applications, including machine tools, general industrial machinery, precision instruments, semiconductor and LCD manufacturing equipment, industrial robots, electronic devices, and transport systems, as well as in construction, aerospace, medical and assistive, and other manufacturing industries. The company was incorporated in 1946 and is headquartered in Tokyo, Japan.