Analyzing PACCAR (PCAR) & Terex Corporation (TEX)
PACCAR (NASDAQ: PCAR) and Terex Corporation (NYSE:TEX) are both mid-cap auto/tires/trucks companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.
PACCAR pays an annual dividend of $1.00 per share and has a dividend yield of 1.5%. Terex Corporation pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. PACCAR pays out 26.7% of its earnings in the form of a dividend. Terex Corporation pays out -50.8% 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. Terex Corporation has raised its dividend for 3 consecutive years.
This table compares PACCAR and Terex Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares PACCAR and Terex Corporation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|PACCAR||$17.26 billion||1.40||$2.36 billion||$3.74||18.38|
|Terex Corporation||$4.22 billion||0.88||$152.10 million||($0.63)||-66.24|
PACCAR has higher revenue and earnings than Terex Corporation. Terex Corporation is trading at a lower price-to-earnings ratio than PACCAR, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
62.7% of PACCAR shares are held by institutional investors. Comparatively, 97.4% of Terex Corporation shares are held by institutional investors. 2.6% of PACCAR shares are held by company insiders. Comparatively, 2.5% of Terex Corporation shares are held 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.
Risk and Volatility
PACCAR has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Terex Corporation has a beta of 1.84, suggesting that its share price is 84% more volatile than the S&P 500.
This is a breakdown of recent recommendations for PACCAR and Terex Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
PACCAR currently has a consensus target price of $71.75, indicating a potential upside of 4.38%. Terex Corporation has a consensus target price of $36.15, indicating a potential downside of 13.36%. Given PACCAR’s stronger consensus rating and higher probable upside, analysts plainly believe PACCAR is more favorable than Terex Corporation.
PACCAR beats Terex Corporation on 12 of the 17 factors compared between the two stocks.
PACCAR Inc (PACCAR) is a technology company. The Company’s segments include Truck, Parts and Financial Services. The Truck segment includes the design, manufacture and distribution of light-, medium- and heavy-duty commercial trucks. The Company’s trucks are marketed under the Kenworth, Peterbilt and DAF nameplates. It also manufactures engines, primarily for use in the Company’s trucks, at its facilities in Columbus, Mississippi; Eindhoven, the Netherlands, and Ponta Grossa, Brazil. The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles. The Financial Services segment includes finance and leasing products and services provided to customers and dealers. Its Other business includes the manufacturing and marketing of industrial winches. The Company operates in Australia and Brazil and sells trucks and parts to customers in Asia, Africa, Middle East and South America.
About Terex Corporation
Terex Corporation is a manufacturer of lifting and material processing products and services that deliver lifecycle solutions. The Company has three business segments: Aerial Work Platforms (AWP), Cranes and Materials Processing (MP). It delivers lifecycle solutions to a range of industries, including the construction, infrastructure, manufacturing, shipping, utility, quarrying and mining industries. The AWP segment designs, manufactures, services and markets aerial work platform equipment, telehandlers and light towers. The AWP segment’s products are used by its customers to construct and maintain industrial, commercial and residential buildings and facilities, and for other commercial operations, as well as in a range of infrastructure projects. The Cranes segment’s products are used by its customers for construction and manufacturing facilities, among others. The MP segment’s products are used by its customers in construction, infrastructure and recycling projects.
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