Komatsu (OTCMKTS:KMTUY – Get Free Report) and Parker-Hannifin (NYSE:PH – Get Free Report) are both large-cap industrials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.
Profitability
This table compares Komatsu and Parker-Hannifin’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Komatsu | 8.93% | 10.51% | 5.93% |
| Parker-Hannifin | 16.97% | 28.48% | 13.49% |
Dividends
Komatsu pays an annual dividend of $0.89 per share and has a dividend yield of 1.9%. Parker-Hannifin pays an annual dividend of $8.00 per share and has a dividend yield of 0.9%. Komatsu pays out 32.6% of its earnings in the form of a dividend. Parker-Hannifin pays out 28.1% 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. Parker-Hannifin has raised its dividend for 70 consecutive years.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Komatsu | 0 | 1 | 0 | 0 | 2.00 |
| Parker-Hannifin | 0 | 2 | 17 | 0 | 2.89 |
Parker-Hannifin has a consensus price target of $1,114.55, suggesting a potential upside of 20.42%. Given Parker-Hannifin’s stronger consensus rating and higher probable upside, analysts plainly believe Parker-Hannifin is more favorable than Komatsu.
Valuation & Earnings
This table compares Komatsu and Parker-Hannifin”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Komatsu | $27.45 billion | 1.55 | $2.48 billion | $2.73 | 16.74 |
| Parker-Hannifin | $21.50 billion | 5.43 | $3.65 billion | $28.49 | 32.49 |
Parker-Hannifin has lower revenue, but higher earnings than Komatsu. Komatsu is trading at a lower price-to-earnings ratio than Parker-Hannifin, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
0.2% of Komatsu shares are owned by institutional investors. Comparatively, 82.4% of Parker-Hannifin shares are owned by institutional investors. 2.9% of Komatsu shares are owned by company insiders. Comparatively, 0.3% of Parker-Hannifin shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Risk & Volatility
Komatsu has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Parker-Hannifin has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.
Summary
Parker-Hannifin beats Komatsu on 14 of the 17 factors compared between the two stocks.
About Komatsu
Komatsu Ltd. manufactures and sells construction, mining, and utility equipment in Japan, the Americas, Europe, China, Rest of Asia, Oceania, the Middle East, Africa, and CIS countries. It operates through three segments: Construction, Mining and Utility Equipment; Retail Finance; and Industrial Machinery and Others. The company offers construction and mining equipment, including excavators, wheel loaders, bulldozers, motor graders, dump truck, rope and hybrid shovels, electric wheel loaders, continuous miners, and jumbo drills. It also provides forestry equipment, including harvesters, forwarders, feller bunchers, excavators, mini excavators, and forklifts; demolition, waste, and recycling equipment, such as mobile crushers, hydraulic excavators, wheel loaders, and mini shovels; material handling equipment; and tunnel-boring machines, pipe layers, towing tractors, and engines. In addition, the company offers industrial machinery, including presses, sheet-metal machinery, 3D laser cutting machine, transfer machines, battery manufacturing equipment, wire saws, thermos modules, thermoelectric generation module, and temperature control products; quarry equipment; agricultural and livestock equipment; EH sensor device; iron and steel casting products; and logistics equipment. Further, the company provides retail financing; construction machinery rental services; remanufactured products; other support services; transportation, warehousing, packing, and other services; and purchases and sells used equipment. Komatsu Ltd. was founded in 1884 and is headquartered in Tokyo, Japan.
About Parker-Hannifin
Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. The company operates through two segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial segment offers sealing, shielding, thermal products and systems, adhesives, coatings, and noise vibration and harshness solutions; filters, systems, and diagnostics solutions to ensure purity and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors used in fluid and gas handling; and hydraulic, pneumatic, and electromechanical components and systems for builders and users of mobile and industrial machinery and equipment. This segment sells its products to original equipment manufacturers (OEMs) and distributors who serve the replacement markets in manufacturing, packaging, processing, transportation, construction, refrigeration and air conditioning, agricultural, and military machinery and equipment industries. The Aerospace Systems segment offers products for use in commercial and military airframe and engine programs, such as control actuation systems and components, engine build-up ducting, engine exhaust nozzles and assemblies, engine systems and components, fluid conveyance systems and components, fuel systems and components, fuel tank inerting systems, hydraulic systems and components, lubrication components, avionics, sensors, pneumatic control components, thermal management products, fire detection and suppression systems and components, and wheels and brakes, as well as fluid metering, delivery, and atomization devices. This segment markets its products directly to OEMs and end users. The company markets its products through direct-sales employees, independent distributors, and sales representatives. Parker-Hannifin Corporation was founded in 1917 and is headquartered in Cleveland, Ohio.
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