Critical Review: Columbus McKinnon Corporation (CMCO) versus Caterpillar (CAT)
Columbus McKinnon Corporation (NASDAQ: CMCO) and Caterpillar (NYSE:CAT) are both industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.
This is a breakdown of current ratings and recommmendations for Columbus McKinnon Corporation and Caterpillar, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Columbus McKinnon Corporation||0||0||3||0||3.00|
Columbus McKinnon Corporation presently has a consensus price target of $33.67, suggesting a potential upside of 9.20%. Caterpillar has a consensus price target of $105.95, suggesting a potential downside of 7.00%. Given Columbus McKinnon Corporation’s stronger consensus rating and higher possible upside, equities analysts plainly believe Columbus McKinnon Corporation is more favorable than Caterpillar.
Insider & Institutional Ownership
84.1% of Columbus McKinnon Corporation shares are owned by institutional investors. Comparatively, 70.3% of Caterpillar shares are owned by institutional investors. 3.9% of Columbus McKinnon Corporation shares are owned by insiders. Comparatively, 0.2% of Caterpillar shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Columbus McKinnon Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. Caterpillar pays an annual dividend of $3.12 per share and has a dividend yield of 2.7%. Columbus McKinnon Corporation pays out 25.0% of its earnings in the form of a dividend. Caterpillar pays out 2,080.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Columbus McKinnon Corporation has raised its dividend for 7 consecutive years.
This table compares Columbus McKinnon Corporation and Caterpillar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Columbus McKinnon Corporation||2.06%||10.30%||3.60%|
Volatility & Risk
Columbus McKinnon Corporation has a beta of 1.92, meaning that its share price is 92% more volatile than the S&P 500. Comparatively, Caterpillar has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.
Earnings and Valuation
This table compares Columbus McKinnon Corporation and Caterpillar’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Columbus McKinnon Corporation||$691.84 million||1.01||$79.80 million||$0.64||48.17|
|Caterpillar||$39.89 billion||1.69||$5.84 billion||$0.15||759.47|
Caterpillar has higher revenue and earnings than Columbus McKinnon Corporation. Columbus McKinnon Corporation is trading at a lower price-to-earnings ratio than Caterpillar, indicating that it is currently the more affordable of the two stocks.
Columbus McKinnon Corporation beats Caterpillar on 10 of the 18 factors compared between the two stocks.
About Columbus McKinnon Corporation
Columbus McKinnon Corporation is a global designer, manufacturer and marketer of hoists, actuators, cranes, rigging tools, digital power control systems, and other material handling products serving various commercial and industrial end user markets. The Company’s products include various electric, air-powered, lever, and hand hoists, hoist trolleys, winches, industrial crane systems, such as steel bridge, gantry and jib cranes and aluminum work station cranes; alloy and carbon steel chain; forged attachments, such as hooks, shackles, textile slings, clamps, logging tools and load binders; mechanical and electromechanical actuators and rotary unions; below-the-hook special purpose lifters and tire shredders; power and motion control systems, such as alternate current (AC) and direct current (DC) drive systems, radio remote controls, push button pendant stations, brakes, and collision avoidance and power delivery subsystems.
Caterpillar Inc. is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The Company operates through segments, including Construction Industries, which is engaged in supporting customers using machinery in infrastructure, forestry and building construction; Resource Industries, which is engaged in supporting customers using machinery in mining, quarry, waste and material handling applications; Energy & Transportation, which supports customers in oil and gas, power generation, marine, rail and industrial applications, including Cat machines; Financial Products segment, which provides financing and related services, and All Other operating segments, which includes activities, such as product management and development, and manufacturing of filters and fluids, undercarriage, tires and rims, ground engaging tools, fluid transfer products, and sealing and connecting components for Cat products.
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