IHI (OTCMKTS:IHICY – Get Free Report) and Komatsu (OTCMKTS:KMTUY – Get Free Report) are both large-cap industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.
Profitability
This table compares IHI and Komatsu’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| IHI | N/A | N/A | N/A |
| Komatsu | 8.93% | 10.51% | 5.93% |
Volatility and Risk
IHI has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Komatsu has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| IHI | $10.92 billion | 1.72 | $1.06 billion | $1.03 | 16.84 |
| Komatsu | $27.45 billion | 1.63 | $2.48 billion | $2.73 | 17.61 |
Komatsu has higher revenue and earnings than IHI. IHI is trading at a lower price-to-earnings ratio than Komatsu, indicating that it is currently the more affordable of the two stocks.
Dividends
IHI pays an annual dividend of $0.07 per share and has a dividend yield of 0.4%. Komatsu pays an annual dividend of $0.89 per share and has a dividend yield of 1.9%. IHI pays out 6.8% of its earnings in the form of a dividend. Komatsu pays out 32.6% 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.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for IHI and Komatsu, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| IHI | 0 | 2 | 0 | 0 | 2.00 |
| Komatsu | 0 | 1 | 0 | 1 | 3.00 |
Institutional and Insider Ownership
0.2% of Komatsu shares are owned by institutional investors. 2.9% of Komatsu shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Summary
Komatsu beats IHI on 13 of the 15 factors compared between the two stocks.
About IHI
IHI Corporation designs and builds engineering solutions in Japan and internationally. The company operates through four segments: Resources, Energy and Environment; Social Infrastructure; Industrial Systems and General-Purpose Machinery; and Aero Engine, Space and Defense. The company engages in the manufacturing, sale, and provision of services related to power systems plants for land use and power systems for chips; carbon solutions comprising boilers and storage facilities; components for nuclear power plants; bridges and water gates, transport systems, shield systems, and concrete construction materials; vehicular turbochargers, parking, heat treatment and surface engineering; transport machineries; logistics and industrial systems; and rotating machineries comprising compressors, separation systems, and turbochargers for ships. It also offers 3D laser radars, X-ray inspection systems, monitoring equipment, oil leak monitors, vibration control systems and seismic isolation floor systems, and disaster prevention equipment; environmental monitoring; cryogenic products, material handling systems, steelmaking equipment, pulp and paper machinery, agricultural machinery, life associated equipment; aero engines; rocket, space utilization, defense, and traffic control systems; and communication, electronic, electric measuring, information processing machines, and other instruments and equipment. In addition, the company sells and rents real estate. The company was formerly known as Ishikawajima-Harima Heavy Industries Co., Ltd and changed its name to IHI Corporation in 2007. IHI Corporation was founded in 1853 and is headquartered in Tokyo, Japan.
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.
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