Deere & Company (NYSE:DE – Get Free Report) and Kawasaki Heavy Industries (OTCMKTS:KWHIY – Get Free Report) are both large-cap industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, dividends, valuation, profitability, risk, earnings and institutional ownership.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Deere & Company and Kawasaki Heavy Industries, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Deere & Company | 0 | 8 | 16 | 0 | 2.67 |
| Kawasaki Heavy Industries | 0 | 2 | 0 | 0 | 2.00 |
Deere & Company presently has a consensus target price of $680.73, suggesting a potential downside of 1.73%. Given Deere & Company’s stronger consensus rating and higher possible upside, research analysts clearly believe Deere & Company is more favorable than Kawasaki Heavy Industries.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Deere & Company | $46.88 billion | 3.98 | $5.03 billion | $18.00 | 38.48 |
| Kawasaki Heavy Industries | $15.35 billion | 0.89 | $713.84 million | $0.26 | 23.92 |
Deere & Company has higher revenue and earnings than Kawasaki Heavy Industries. Kawasaki Heavy Industries is trading at a lower price-to-earnings ratio than Deere & Company, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Deere & Company and Kawasaki Heavy Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Deere & Company | 10.16% | 18.10% | 4.60% |
| Kawasaki Heavy Industries | 4.74% | 13.40% | 3.49% |
Dividends
Deere & Company pays an annual dividend of $6.48 per share and has a dividend yield of 0.9%. Kawasaki Heavy Industries pays an annual dividend of $0.06 per share and has a dividend yield of 1.0%. Deere & Company pays out 36.0% of its earnings in the form of a dividend. Kawasaki Heavy Industries pays out 23.1% 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. Deere & Company has raised its dividend for 4 consecutive years. Kawasaki Heavy Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
68.6% of Deere & Company shares are held by institutional investors. 0.3% of Deere & Company shares are held 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.
Volatility & Risk
Deere & Company has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, Kawasaki Heavy Industries has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.
Summary
Deere & Company beats Kawasaki Heavy Industries on 15 of the 17 factors compared between the two stocks.
About Deere & Company
Deere & Co. engages in the manufacture and distribution of equipment used in agriculture, construction, forestry, and turf care. It operates through the following segments: Agriculture and Turf, Construction and Forestry, and Financial Services. The Agriculture and Turf segment focuses on the distribution and manufacture of a full line of agriculture and turf equipment and related service parts. The Construction and Forestry segment offers machines and service parts used in construction, earthmoving, road building, material handling and timber harvesting. The Financial Services segment finances sales and leases by John Deere dealers of new and used agriculture and turf equipment and construction and forestry equipment. The company was founded by John Deere in 1837 and is headquartered in Moline, IL.
About Kawasaki Heavy Industries
Kawasaki Heavy Industries, Ltd. engages in aerospace systems, energy solution and marine engineering, precision machinery and robot, rolling stock, and motorcycle and engine businesses in Japan and internationally. It manufactures aircraft for the Japan ministry of defense; helicopters; and helicopter and jet engines for commercial aircrafts. The company also manufactures railway cars; a range of rolling stocks, including Shinkansen, electric cars, passenger coaches, freight cars, locomotives, diesel locomotives, and transit systems. In addition, it engages in the production and sale of energy-related machinery and systems, marine machinery and systems, industrial equipment, and environmental equipment. Further, the company manufactures and supplies motorcycles, off-road four wheelers, watercrafts, general-purpose gasoline engines, etc. Additionally, it manufactures and sells pumps, motors, valves, and various hydraulic machinery, as well as assembles hydraulic systems; and industrial robots for use in welding, assembly, handling, painting, and palletization for various industries, including automotive and electronics industries. The company was founded in 1878 and is headquartered in Tokyo, Japan.
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