Komatsu (OTCMKTS:KMTUY – Get Free Report) and Eastern (NASDAQ:EML – Get Free Report) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, profitability, analyst recommendations, institutional ownership and dividends.
Institutional and Insider Ownership
0.2% of Komatsu shares are held by institutional investors. Comparatively, 77.0% of Eastern shares are held by institutional investors. 2.9% of Komatsu shares are held by company insiders. Comparatively, 18.4% of Eastern shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Komatsu and Eastern”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Komatsu | $27.45 billion | 1.33 | $2.48 billion | $2.78 | 14.11 |
| Eastern | $248.97 million | 0.76 | $7.13 million | $1.34 | 23.45 |
Komatsu has higher revenue and earnings than Eastern. Komatsu is trading at a lower price-to-earnings ratio than Eastern, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Komatsu and Eastern’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Komatsu | 8.92% | 10.56% | 5.94% |
| Eastern | 3.44% | 3.38% | 1.89% |
Risk and Volatility
Komatsu has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, Eastern has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Komatsu and Eastern, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Komatsu | 0 | 1 | 0 | 2 | 3.33 |
| Eastern | 0 | 2 | 0 | 0 | 2.00 |
Dividends
Komatsu pays an annual dividend of $0.89 per share and has a dividend yield of 2.3%. Eastern pays an annual dividend of $0.44 per share and has a dividend yield of 1.4%. Komatsu pays out 32.0% of its earnings in the form of a dividend. Eastern pays out 32.8% 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. Komatsu is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Komatsu beats Eastern on 12 of the 15 factors compared between the two stocks.
About Komatsu
Komatsu Ltd. is a Japanese manufacturer of construction, mining, utility and forestry equipment. Its products include excavators, bulldozers, wheel loaders, motor graders and mining trucks, along with machinery and services for forestry operations. The company also provides equipment maintenance, parts and technology solutions, including systems that support fleet management and automated operations. Founded in 1921 and headquartered in Tokyo, Komatsu has expanded from its origins as a Japanese industrial manufacturer into a global equipment and services provider.
About Eastern
The Eastern Company (NASDAQ: EML) is a diversified manufacturer of engineered products serving industrial, security and transportation markets. The company develops and produces products used in commercial vehicles, industrial equipment, specialty vehicles and other applications where security, access control and engineered components are required. Its product offerings include locks, latches, access hardware and other security-related components, as well as vehicle mirrors and related equipment.
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