Analyzing Astec Industries (ASTE) & Caterpillar (CAT)
Astec Industries (NASDAQ: ASTE) 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 earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.
Volatility and Risk
Astec Industries has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, Caterpillar has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500.
This table compares Astec Industries and Caterpillar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
78.6% of Astec Industries shares are owned by institutional investors. Comparatively, 69.2% of Caterpillar shares are owned by institutional investors. 1.7% of Astec Industries shares are owned by company insiders. Comparatively, 0.2% of Caterpillar shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Astec Industries pays an annual dividend of $0.40 per share and has a dividend yield of 0.8%. Caterpillar pays an annual dividend of $3.12 per share and has a dividend yield of 2.7%. Astec Industries pays out 19.0% 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. Caterpillar has increased its dividend for 7 consecutive years. Caterpillar is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent ratings and target prices for Astec Industries and Caterpillar, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Astec Industries presently has a consensus price target of $85.00, indicating a potential upside of 76.42%. Caterpillar has a consensus price target of $105.64, indicating a potential downside of 9.70%. Given Astec Industries’ stronger consensus rating and higher probable upside, equities analysts plainly believe Astec Industries is more favorable than Caterpillar.
Earnings & Valuation
This table compares Astec Industries and Caterpillar’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Astec Industries||$1.19 billion||0.93||$100.27 million||$2.10||22.94|
|Caterpillar||$39.89 billion||1.73||$5.84 billion||$0.15||779.87|
Caterpillar has higher revenue and earnings than Astec Industries. Astec Industries is trading at a lower price-to-earnings ratio than Caterpillar, indicating that it is currently the more affordable of the two stocks.
Caterpillar beats Astec Industries on 10 of the 18 factors compared between the two stocks.
About Astec Industries
Astec Industries, Inc. designs, engineers, manufactures and markets equipment and components used primarily in road building and related construction activities. Its segments include Infrastructure Group, Aggregate and Mining Group and Energy Group. The Infrastructure Group segment is made up of five business units, including Astec, Inc., Roadtec, Inc., Carlson Paving Products, Inc., Astec Mobile Machinery GmbH and Astec Australia Pty Ltd. Its Aggregate and Mining Group consists of eight business units that are focused on designing and manufacturing heavy processing equipment, as well as servicing and supplying parts for the aggregate, metallic mining, recycling, ports and bulk handling markets. Its Energy Group includes five business units focused on supplying heavy equipment, such as heaters, drilling rigs, concrete plants, wood chippers and grinders, pump trailers, storage equipment and related parts to the oil and gas, construction and water well industries.
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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