Alamo Group (NYSE: ALG) and Toro Company (The) (NYSE:TTC) are both industrial products companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitabiliy, analyst recommendations, institutional ownership and valuation.
This is a breakdown of current recommendations and price targets for Alamo Group and Toro Company (The), as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Toro Company (The)||0||1||3||0||2.75|
Alamo Group presently has a consensus price target of $85.00, suggesting a potential downside of 8.01%. Toro Company (The) has a consensus price target of $57.33, suggesting a potential downside of 19.08%. Given Alamo Group’s higher possible upside, equities research analysts plainly believe Alamo Group is more favorable than Toro Company (The).
This table compares Alamo Group and Toro Company (The)’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Toro Company (The)||10.23%||44.74%||17.18%|
Valuation and Earnings
This table compares Alamo Group and Toro Company (The)’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alamo Group||$849.17 million||1.26||$91.84 million||$3.76||24.57|
|Toro Company (The)||$2.46 billion||3.11||$412.45 million||$2.26||31.35|
Toro Company (The) has higher revenue and earnings than Alamo Group. Alamo Group is trading at a lower price-to-earnings ratio than Toro Company (The), indicating that it is currently the more affordable of the two stocks.
Alamo Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. Toro Company (The) pays an annual dividend of $0.70 per share and has a dividend yield of 1.0%. Alamo Group pays out 10.6% of its earnings in the form of a dividend. Toro Company (The) pays out 31.0% 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. Alamo Group has increased its dividend for 2 consecutive years and Toro Company (The) has increased its dividend for 7 consecutive years. Toro Company (The) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
89.9% of Alamo Group shares are owned by institutional investors. Comparatively, 75.9% of Toro Company (The) shares are owned by institutional investors. 4.0% of Alamo Group shares are owned by company insiders. Comparatively, 5.7% of Toro Company (The) shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Volatility and Risk
Alamo Group has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, Toro Company (The) has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500.
Toro Company (The) beats Alamo Group on 12 of the 17 factors compared between the two stocks.
About Alamo Group
Alamo Group Inc. is engaged in the design and manufacture of agricultural equipment and infrastructure maintenance equipment for governmental and industrial use. The Company operates in Industrial, Agricultural and European segments. The Company’s products include tractor-mounted mowing and other vegetation maintenance equipment, street sweepers, excavators, vacuum trucks, snow removal equipment, pothole patchers, zero turn radius mowers, agricultural implements and related aftermarket. As of December 31, 2016, the Company operated 24 plants in North America, Europe, Australia and Brazil. The Company sells its products through a network of independent dealers and distributors to Governmental end users, related independent contractors, as well as to the agricultural and commercial turf markets. It also offers replacement parts for each of its wholegoods lines. The Company’s products are sold through various marketing organizations, and dealer and distributor networks.
About Toro Company (The)
The Toro Company (Toro) is engaged in the designing, manufacturing, and marketing of professional turf maintenance equipment and services, turf irrigation systems, landscaping equipment and lighting products, snow and ice management products, agricultural micro-irrigation systems, rental and specialty construction equipment, and residential yard and snow thrower products. The Company operates through three segments: Professional, Residential and Distribution. Under the Professional segment, Toro designs professional turf, landscape and lighting, rental and specialty construction, snow and ice management, and agricultural products. The Residential segment provides products, such as riding products, home solutions products and snow thrower products. It manufactures and markets various walk power mower models. The Distribution segment consists of Company-owned domestic distributorship. Its brands include Toro, Exmark, BOSS, Irritrol, Hayter, Pope, Unique Lighting Systems and Lawn-Boy.
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