Critical Survey: Terex (TEX) and Its Rivals

Terex (NYSE: TEX) is one of 15 public companies in the “Heavy Machinery & Vehicles” industry, but how does it compare to its rivals? We will compare Terex to similar businesses based on the strength of its analyst recommendations, earnings, valuation, institutional ownership, profitability, risk and dividends.

Institutional and Insider Ownership

96.9% of Terex shares are owned by institutional investors. Comparatively, 82.2% of shares of all “Heavy Machinery & Vehicles” companies are owned by institutional investors. 2.5% of Terex shares are owned by insiders. Comparatively, 8.9% of shares of all “Heavy Machinery & Vehicles” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Terex and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Terex 2 7 5 0 2.21
Terex Competitors 171 885 963 17 2.41

Terex presently has a consensus price target of $40.33, indicating a potential downside of 12.94%. As a group, “Heavy Machinery & Vehicles” companies have a potential upside of 6.85%. Given Terex’s rivals stronger consensus rating and higher possible upside, analysts clearly believe Terex has less favorable growth aspects than its rivals.

Profitability

This table compares Terex and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Terex -2.62% 7.01% 2.60%
Terex Competitors 4.06% 13.41% 3.96%

Earnings and Valuation

This table compares Terex and its rivals gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Terex $4.44 billion -$176.10 million -53.87
Terex Competitors $6.06 billion $48.37 million 113.46

Terex’s rivals have higher revenue and earnings than Terex. Terex is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Dividends

Terex pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Terex pays out -37.2% of its earnings in the form of a dividend. As a group, “Heavy Machinery & Vehicles” companies pay a dividend yield of 1.2% and pay out 33.7% of their earnings in the form of a dividend. Terex has raised its dividend for 3 consecutive years.

Risk and Volatility

Terex has a beta of 1.88, meaning that its share price is 88% more volatile than the S&P 500. Comparatively, Terex’s rivals have a beta of 1.44, meaning that their average share price is 44% more volatile than the S&P 500.

Summary

Terex rivals beat Terex on 12 of the 15 factors compared.

About Terex

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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