Critical Comparison: Eaton (ETN) versus Kubota (KUBTY)
Eaton (NYSE: ETN) and Kubota (OTCMKTS:KUBTY) are both large-cap industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.
Eaton pays an annual dividend of $2.40 per share and has a dividend yield of 2.9%. Kubota does not pay a dividend. Eaton pays out 55.0% of its earnings in the form of a dividend. Eaton has raised its dividend for 8 consecutive years.
This table compares Eaton and Kubota’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Eaton||$19.75 billion||1.87||$1.92 billion||$4.36||19.25|
|Kubota||$3.53 billion||7.34||$316.27 million||$5.26||19.92|
Eaton has higher revenue and earnings than Kubota. Eaton is trading at a lower price-to-earnings ratio than Kubota, indicating that it is currently the more affordable of the two stocks.
This table compares Eaton and Kubota’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
76.5% of Eaton shares are owned by institutional investors. Comparatively, 0.3% of Kubota shares are owned by institutional investors. 0.8% of Eaton shares are owned by company insiders. Comparatively, 0.0% of Kubota shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a summary of current ratings and target prices for Eaton and Kubota, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Eaton presently has a consensus target price of $83.08, suggesting a potential downside of 1.04%. Given Eaton’s stronger consensus rating and higher probable upside, equities analysts clearly believe Eaton is more favorable than Kubota.
Volatility and Risk
Eaton has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, Kubota has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.
Eaton beats Kubota on 13 of the 17 factors compared between the two stocks.
Eaton Company Profile
Eaton Corporation (Eaton) is a diversified power management company. It is engaged in the manufacturing of electrical components and systems for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use, and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety. On January 1, 2011, it closed the acquisition of the Tuthill Coupling Group, which is a division of the Tuthill Corporation. It has five segments: Electrical Americas and Electrical Rest of World; Hydraulics; Aerospace; Truck, and Automotive. On October 1, 2010, it acquired CopperLogic, Inc. On July 15, 2010, it acquired EMC Engineers, Inc. In May 2011, it acquired Internormen Technology Group. In August 2011, it acquired IE Power, Inc. In December 2011, it acquired E.A. Pedersen Company.
Kubota Company Profile
KUBOTA Corporation is a manufacturer of a range of machinery, and other industrial and consumer products. The Company operates through three segments: Farm & Industrial Machinery, Water & Environment, and Other. The Farm & Industrial Machinery segment is engaged in the manufacture and sale of products, which include farm equipment, engines, construction machinery and electronic equipped machinery. Its Water & Environment segment engages in the manufacture and sale of pipe‐related products, such as ductile iron pipes, plastic pipes, pumps, valves and other products; environment‐related products, including environmental control plants and other products, and social infrastructure‐related products, such as industrial castings, ceramics, spiral‐welded steel pipes and other products. The Other segment is engaged in services and other businesses. The Company has operations in Japan, the United States, Germany, China, Thailand and other Southeast Asian regions.
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