Komatsu (OTCMKTS:KMTUY – Get Free Report) and AGCO (NYSE:AGCO – Get Free Report) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, dividends and analyst recommendations.
Profitability
This table compares Komatsu and AGCO’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% |
| AGCO | 2.76% | 9.66% | 3.39% |
Risk & Volatility
Komatsu has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, AGCO has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.
Insider and Institutional Ownership
0.2% of Komatsu shares are held by institutional investors. Comparatively, 78.8% of AGCO shares are held by institutional investors. 2.9% of Komatsu shares are held by company insiders. Comparatively, 0.6% of AGCO shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Komatsu and AGCO”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 | 14.09 |
| AGCO | $10.08 billion | 0.78 | $726.50 million | $3.89 | 29.36 |
Komatsu has higher revenue and earnings than AGCO. Komatsu is trading at a lower price-to-earnings ratio than AGCO, indicating that it is currently the more affordable of the two stocks.
Dividends
Komatsu pays an annual dividend of $0.89 per share and has a dividend yield of 2.3%. AGCO pays an annual dividend of $1.20 per share and has a dividend yield of 1.1%. Komatsu pays out 32.0% of its earnings in the form of a dividend. AGCO pays out 30.8% 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. AGCO has increased its dividend for 12 consecutive years.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Komatsu and AGCO, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Komatsu | 0 | 1 | 0 | 2 | 3.33 |
| AGCO | 2 | 7 | 5 | 0 | 2.21 |
AGCO has a consensus price target of $123.67, indicating a potential upside of 8.29%. Given AGCO’s higher possible upside, analysts plainly believe AGCO is more favorable than Komatsu.
Summary
Komatsu beats AGCO on 10 of the 18 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 AGCO
AGCO Corporation designs, manufactures and distributes agricultural equipment and technology for farmers around the world. Its products include tractors, combines, hay and forage equipment, sprayers, seeding and tillage equipment, grain storage systems, and precision agriculture solutions. The company’s brands include Fendt, Massey Ferguson, Valtra, and PTx, its precision agriculture business. AGCO was formed in 1990 and is headquartered in Duluth, Georgia. AGCO serves agricultural markets globally through a network of dealers and other distribution partners.
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