Analyzing Eaton (ETN) and Kubota (KUBTY)

Eaton (NYSE: ETN) and Kubota (OTCMKTS:KUBTY) are both large-cap industrial products companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Dividends

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 35.9% of its earnings in the form of a dividend. Kubota has increased its dividend for 8 consecutive years.

Volatility & Risk

Eaton has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500. Comparatively, Kubota has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Eaton and Kubota, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eaton 2 7 7 0 2.31
Kubota 1 0 0 0 1.00

Eaton presently has a consensus price target of $86.83, suggesting a potential upside of 6.11%. Given Eaton’s stronger consensus rating and higher possible upside, equities analysts plainly believe Eaton is more favorable than Kubota.

Institutional & Insider Ownership

76.5% of Eaton shares are held by institutional investors. Comparatively, 0.3% of Kubota shares are held by institutional investors. 0.8% of Eaton shares are held by insiders. Comparatively, 0.0% of Kubota shares are held 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.

Profitability

This table compares Eaton and Kubota’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eaton 14.60% 12.84% 6.53%
Kubota N/A N/A N/A

Valuation & Earnings

This table compares Eaton and Kubota’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eaton $20.40 billion 1.77 $2.99 billion $6.68 12.25
Kubota $3.53 billion 6.67 $316.27 million N/A N/A

Eaton has higher revenue and earnings than Kubota.

Summary

Eaton beats Kubota on 12 of the 15 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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