Mayville Engineering (NYSE:MEC) versus REV Group (NYSE:REVG) Critical Analysis

Mayville Engineering (NYSE:MEC) and REV Group (NYSE:REVG) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, profitability, dividends, risk and institutional ownership.

Insider and Institutional Ownership

45.4% of Mayville Engineering shares are held by institutional investors. 5.6% of Mayville Engineering shares are held by insiders. Comparatively, 1.7% of REV Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Mayville Engineering and REV Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mayville Engineering	1	1	3	0	2.40
REV Group	0	2	1	1	2.75

Mayville Engineering presently has a consensus target price of $39.67, indicating a potential upside of 211.97%. REV Group has a consensus target price of $55.67, indicating a potential downside of 12.88%. Given Mayville Engineering’s higher possible upside, research analysts clearly believe Mayville Engineering is more favorable than REV Group.

Earnings & Valuation

This table compares Mayville Engineering and REV Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mayville Engineering	$546.49 million	0.59	-$8.11 million	($0.84)	-15.14
REV Group	$2.46 billion	1.27	$95.20 million	$1.91	33.46

REV Group has higher revenue and earnings than Mayville Engineering. Mayville Engineering is trading at a lower price-to-earnings ratio than REV Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Mayville Engineering and REV Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mayville Engineering	-2.95%	-6.63%	-2.99%
REV Group	3.86%	31.67%	10.30%

Risk and Volatility

Mayville Engineering has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500. Comparatively, REV Group has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Summary

REV Group beats Mayville Engineering on 9 of the 14 factors compared between the two stocks.

About Mayville Engineering

Mayville Engineering Company, Inc., together with its subsidiaries, engages in the production, design, prototyping and tooling, fabrication, aluminum extrusion, coating, and assembling of aftermarket components in the United States. It also supplies engineered components to original equipment manufacturers. The company serves heavy and medium duty commercial vehicles, construction and access equipment, powersports, agriculture, military, and other end markets. Mayville Engineering Company, Inc. was founded in 1945 and is headquartered in Milwaukee, Wisconsin.

About REV Group

REV Group, Inc., together with its subsidiaries, designs, manufactures, and distributes specialty vehicles, and related aftermarket parts and services in the United States, Canada, and internationally. It operates through three segments: Fire & Emergency, Commercial, and Recreation. The Fire & Emergency segment provides fire apparatus equipment under the Emergency One, Kovatch Mobile Equipment, Ferrara, Spartan Emergency Response, Smeal, Spartan Fire Chassis, and Ladder Tower brand names; and ambulances under the American Emergency Vehicles, Horton Emergency Vehicles, Leader Emergency Vehicles, Road Rescue, and Wheeled Coach brand names. The Commercial segment offers transit buses, type A school buses, sweepers, and terminal trucks under the Collins Bus, Eldorado National (California), Magellan, Capacity, and LayMor brand names. The Recreation segment offers motorized and towable RV models under the American Coach, Fleetwood RV, Holiday Rambler, Renegade RV, Midwest Automotive Designs, and Lance Camper brands; and produces a range of custom molded fiberglass products. The company sells its products to municipalities, government agencies, private contractors, consumers, and industrial and commercial end users through its direct sales force or dealer network. The company was formerly known as Allied Specialty Vehicles, Inc. and changed its name to REV Group, Inc. in November 2015. REV Group, Inc. was incorporated in 2008 and is based in Brookfield, Wisconsin.