Modine or Dana: Which Stock Should Investors Place Their Bet On?

Modine Manufacturing Company MOD and Dana Incorporated DAN both provide thermal-management products for the automotive sector. Modine also provides farm and construction machinery and equipment, as well as heating and cooling equipment for residential and commercial building heating, ventilating, air conditioning, and refrigeration equipment (HVAC). Dana supplies the major motion/drive systems for vehicles and machines.

Year to date, Modine shares have risen 35.2%, and Dana shares have surged 71.7%. Let’s dig deeper into the fundamentals of both these stocks to discover their strengths and weaknesses.

The Case for Modine Stock

In the first quarter of fiscal 2026, Modine reported net sales of $682.8 million, up 3% from $661.5 million a year earlier. The growth was driven by strong performance in the Climate Solutions segment. For fiscal 2026, Modine expects net sales growth of 10-15%.

This year, Modine expanded its Climate Solutions segment through key acquisitions. In April, it acquired AbsolutAire, a maker of direct-fired HVAC and make-up air systems, strengthening its presence in commercial, industrial, food service, and warehousing markets. May saw the acquisition of L.B. White, a specialty heating supplier for agriculture, construction, and events. In July, Modine closed CDI, known for desiccant dehumidification systems and process air handlers, adding U.S. manufacturing capacity. Along with Napps Technology and Scott Springfield, these acquisitions broaden Modine’s product reach, support entry into fast-growing markets, and are expected to boost earnings under the 80/20 operating model.

In fiscal 2025, Modine reported gross margin gains despite lower sales volumes by applying the 80/20 principle. This approach directs resources toward products and markets with the greatest sustainable growth and return potential while streamlining processes. The company is also extending 80/20 practices within its manufacturing facilities to boost production efficiency further. For fiscal 2026, Modine plans to deepen its 80/20 discipline within the Climate Solutions segment. It expects fiscal 2026 adjusted EBITDA in the range of $440-$470 million, representing growth of 12-20%.

On the flip side, Modine’s Performance Technologies revenues in the first quarter of fiscal 2026 were impacted by challenging end-market demand. Heavy-duty equipment sales declined 4% due to market weakness and lower Genset sales. On-highway sales fell 8% amid weaker demand and product exits. Segment adjusted EBITDA dropped 14% mainly due to lower volume and higher material costs. For fiscal 2026, the company expects Performance Technologies revenues to be down 2-12%.

The Case for Dana Stock

In the second quarter of 2025, Dana reported sales from continuing operations of $1.9 billion and sales from discontinued operations of $662 million compared to total sales of $2.05 billion in the year-ago period. In June, the company announced an agreement to sell its Off-Highway business to Allison Transmission for $2.7 billion. The divestiture aligns with Dana’s strategy to become a more streamlined supplier for light- and commercial-vehicle markets, focusing on both traditional and electrified systems.

Following the completion of the transaction, Dana expects to generate approximately $2.4 billion in net cash proceeds. The company intends to use about $2 billion of these proceeds to repay debt and targets a net leverage ratio of roughly 1x over the business cycle. The transaction also enabled Dana to initiate a $1 billion capital return program, which included the repurchase of more than $250 million in shares during the second quarter. The company plans to return an additional $100-$150 million to shareholders in the third quarter and approximately $600 million by year-end.

Dana’s expanded $310 million cost-savings initiative, announced in January, continues to progress well. It realized $60 million in cost savings in the second quarter and $110 million to date. These efforts reinforce the company’s commitment to delivering a 10% adjusted EBITDA margin by 2026. For 2025, the company expects revenues of $7.25-$7.55 billion and an adjusted EBITDA margin of 7.4-8.1%.  

Moreover, ongoing accelerated cost-reduction measures and efficiency gains are helping Dana to offset the effects of tariffs and inflation.

Valuation of MOD & DAN

Modine is trading at a forward sales multiple of 2.66X, closer to its mean of 2.76X over the last five years. Dana’s forward sales multiple sits at 0.35X, closer to its median of 0.46X over the last five years.

How Do Zacks Estimates Compare for MOD & DAN?

The Zacks Consensus Estimate for MOD’s fiscal 2026 EPS implies year-over-year growth of 14.3%. The EPS estimate for fiscal 2026 has remained stagnant over the past 60 days, while for fiscal 2027, it fell in the past seven days.

 
The Zacks Consensus Estimate for DAN’s 2025 EPS implies year-over-year growth of 50%. The EPS estimates for 2025 and 2026 have been trending northward over the past 30 days.

Conclusion

Modine delivered modest sales growth driven by momentum in the Climate Solutions segment due to strategic acquisitions like AbsolutAire and L.B. White. However, weakness in Performance Technologies, lower heavy-duty sales and rising material costs weigh on the company’s near-term prospects.

Dana reported strong debt-reduction plans and an aggressive $1 billion capital return program. Its cost-saving initiatives, efficiency gains and focus on electrified systems position it for solid profitability and margin expansion through 2026.

Dana’s improving margins, accelerating EPS growth, and disciplined capital allocation make it a stronger investment choice than Modine, which faces softer end-market demand and slower profitability gains despite its acquisition-driven growth.

MOD carries a Zacks Rank #3 (Hold), while DAN currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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