CAT vs. ETN, DE, ABBNY, ITW, PH, CTAS, EMR, GWW, JCI, and FERG
Should you be buying Caterpillar stock or one of its competitors? The main competitors of Caterpillar include Eaton (ETN), Deere & Company (DE), ABB (ABBNY), Illinois Tool Works (ITW), Parker-Hannifin (PH), Cintas (CTAS), Emerson Electric (EMR), W.W. Grainger (GWW), Johnson Controls International (JCI), and Ferguson (FERG). These companies are all part of the "industrial products" sector.
Eaton (NYSE:ETN) and Caterpillar (NYSE:CAT) are both large-cap industrial products companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, community ranking, media sentiment, profitability, risk, analyst recommendations, dividends, institutional ownership and valuation.
Caterpillar received 284 more outperform votes than Eaton when rated by MarketBeat users. However, 66.59% of users gave Eaton an outperform vote while only 62.49% of users gave Caterpillar an outperform vote.
83.0% of Eaton shares are held by institutional investors. Comparatively, 71.0% of Caterpillar shares are held by institutional investors. 0.5% of Eaton shares are held by insiders. Comparatively, 0.3% of Caterpillar shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Eaton presently has a consensus price target of $314.27, suggesting a potential downside of 4.82%. Caterpillar has a consensus price target of $323.35, suggesting a potential downside of 7.76%. Given Caterpillar's stronger consensus rating and higher probable upside, analysts clearly believe Eaton is more favorable than Caterpillar.
Eaton pays an annual dividend of $3.76 per share and has a dividend yield of 1.1%. Caterpillar pays an annual dividend of $5.20 per share and has a dividend yield of 1.5%. Eaton pays out 44.4% of its earnings in the form of a dividend. Caterpillar pays out 23.5% 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. Eaton has increased its dividend for 15 consecutive years and Caterpillar has increased its dividend for 29 consecutive years. Caterpillar is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Caterpillar has a net margin of 16.79% compared to Caterpillar's net margin of 14.38%. Eaton's return on equity of 58.61% beat Caterpillar's return on equity.
Caterpillar has higher revenue and earnings than Eaton. Caterpillar is trading at a lower price-to-earnings ratio than Eaton, indicating that it is currently the more affordable of the two stocks.
Eaton has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Caterpillar has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.
In the previous week, Caterpillar had 4 more articles in the media than Eaton. MarketBeat recorded 22 mentions for Caterpillar and 18 mentions for Eaton. Eaton's average media sentiment score of 0.92 beat Caterpillar's score of 0.90 indicating that Caterpillar is being referred to more favorably in the news media.
Summary
Caterpillar beats Eaton on 13 of the 21 factors compared between the two stocks.
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This chart shows the number of new MarketBeat users adding CAT and its top 5 competitors to their watchlist. Each company is represented with a line over a 90 day period.
This chart shows the average media sentiment of NYSE and its competitors over the past 90 days as caculated by MarketBeat. The averaged score is equivalent to the following: Very Negative Sentiment <= -1.5, Negative Sentiment > -1.5 and <= -0.5, Neutral Sentiment > -0.5 and < 0.5, Positive Sentiment >= 0.5 and < 1.5, and Very Positive Sentiment >= 1.5.
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