AGCO (NYSE:AGCO – Get Free Report) and Astec Industries (NASDAQ:ASTE – Get Free Report) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.
Profitability
This table compares AGCO and Astec Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| AGCO | 2.76% | 9.66% | 3.39% |
| Astec Industries | 0.74% | 8.60% | 4.16% |
Dividends
AGCO pays an annual dividend of $1.20 per share and has a dividend yield of 1.1%. Astec Industries pays an annual dividend of $0.52 per share and has a dividend yield of 1.4%. AGCO pays out 30.8% of its earnings in the form of a dividend. Astec Industries pays out 104.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AGCO has increased its dividend for 12 consecutive years.
Valuation & Earnings
This table compares AGCO and Astec Industries”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| AGCO | $10.08 billion | 0.77 | $726.50 million | $3.89 | 29.08 |
| Astec Industries | $1.41 billion | 0.60 | $38.80 million | $0.50 | 73.90 |
AGCO has higher revenue and earnings than Astec Industries. AGCO is trading at a lower price-to-earnings ratio than Astec Industries, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
AGCO has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Astec Industries has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500.
Institutional & Insider Ownership
78.8% of AGCO shares are held by institutional investors. Comparatively, 93.2% of Astec Industries shares are held by institutional investors. 0.6% of AGCO shares are held by company insiders. Comparatively, 1.0% of Astec Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Analyst Ratings
This is a breakdown of current recommendations and price targets for AGCO and Astec Industries, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| AGCO | 2 | 7 | 5 | 0 | 2.21 |
| Astec Industries | 0 | 2 | 1 | 2 | 3.00 |
AGCO currently has a consensus target price of $123.67, indicating a potential upside of 9.31%. Astec Industries has a consensus target price of $52.00, indicating a potential upside of 40.73%. Given Astec Industries’ stronger consensus rating and higher possible upside, analysts plainly believe Astec Industries is more favorable than AGCO.
Summary
AGCO beats Astec Industries on 10 of the 18 factors compared between the two stocks.
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.
About Astec Industries
Astec Industries is a manufacturer of equipment and services for the infrastructure, road construction and aggregate industries. Its products support the production and handling of asphalt, concrete and crushed stone, as well as the construction and maintenance of roads. The company’s offerings include asphalt production plants, roadbuilding equipment, crushers, screens, material washing systems and concrete batch plants. Astec also provides parts, service and other support for its equipment. Founded in 1972 and headquartered in Chattanooga, Tennessee, Astec serves customers in the United States and international markets.
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