Contrasting Caterpillar (NYSE:CAT) & NN (NASDAQ:NNBR)

NN (NASDAQ:NNBR) and Caterpillar (NYSE:CAT) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.

Institutional & Insider Ownership

53.9% of NN shares are held by institutional investors. Comparatively, 71.0% of Caterpillar shares are held by institutional investors. 5.6% of NN shares are held by insiders. Comparatively, 0.3% of Caterpillar shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

NN has a beta of 2.65, meaning that its stock price is 165% more volatile than the S&P 500. Comparatively, Caterpillar has a beta of 1.58, meaning that its stock price is 58% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for NN and Caterpillar, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NN	1	1	2	1	2.60
Caterpillar	0	12	15	0	2.56

NN currently has a consensus target price of $5.67, indicating a potential upside of 44.19%. Caterpillar has a consensus target price of $913.96, indicating a potential upside of 46.77%. Given Caterpillar’s higher probable upside, analysts clearly believe Caterpillar is more favorable than NN.

Earnings & Valuation

This table compares NN and Caterpillar”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NN	$422.21 million	0.87	-$34.00 million	($0.86)	-4.57
Caterpillar	$67.59 billion	4.24	$8.88 billion	$25.49	24.43

Caterpillar has higher revenue and earnings than NN. NN is trading at a lower price-to-earnings ratio than Caterpillar, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares NN and Caterpillar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NN	-5.43%	25.25%	2.60%
Caterpillar	15.21%	59.87%	11.99%

Summary

Caterpillar beats NN on 11 of the 15 factors compared between the two stocks.

About NN

NN, Inc., together with its subsidiaries, designs, manufactures, and sells high-precision components and assemblies for various end markets in the United States and internationally. It operates through two segments, Mobile Solutions and Power Solutions. The Mobile Solutions segment manufactures and sells system critical components for automotive, general industrial, and medical end markets for use in power steering, braking, transmissions, gasoline fuel system, diesel injection, and diesel emissions treatment applications, as well as in heating, ventilation, and air conditioning. The Power Solutions segment designs, manufactures, and sells a range of high-precision metal and plastic components, assemblies, and finished devices used in various applications, such as power control and transportation electrification. Its products include electrical contacts, connectors, contact assemblies, and precision stampings for the electrical, general industrial, automotive, aerospace and defense, and medical end markets. This segment also produces various tools and instruments for the orthopaedics and medical/surgical end markets. NN, Inc. was founded in 1980 and is headquartered in Charlotte, North Carolina.

About Caterpillar

Caterpillar Inc. manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in worldwide. Its Construction Industries segment offers asphalt pavers, compactors, road reclaimers, forestry machines, cold planers, material handlers, track-type tractors, excavators, telehandlers, motor graders, and pipelayers; compact track, wheel, track-type, backhoe, and skid steer loaders; and related parts and tools. The company's Resource Industries segment provides electric rope and hydraulic shovels, draglines, rotary drills, hard rock vehicles, tractors, mining trucks, wheel loaders, off-highway and articulated trucks, wheel tractor scrapers and dozers, fleet management products, landfill and soil compactors, machinery components, autonomous ready vehicles and solutions, work tools, and safety services and mining performance solutions, as well as related parts and services. Its Energy & Transportation segment offers reciprocating engine powered generator sets; reciprocating engines, drivetrain, and integrated systems and solutions; turbines, centrifugal gas compressors, and related services; and diesel-electric locomotives and components, and other rail-related products. The company's Financial Products segment provides operating and finance leases, installment sale contracts, revolving charge accounts, repair/rebuild financing services, working capital loans, and wholesale financing; and insurance and risk management products and services. Its All Other Operating segment offers filters and fluids, undercarriage, ground engaging tools, fluid transfer products, precision seals, and rubber sealing and connecting components; parts distribution; logistics solutions and distribution services; brand management and marketing strategy services; and digital investments services. Caterpillar Inc. was founded in 1925 and is headquartered in Irving, Texas.