Head to Head Analysis: Komatsu (KMTUY) and Astec Industries (ASTE)

Komatsu (OTCMKTS: KMTUY) and Astec Industries (NASDAQ:ASTE) are both industrial products companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Profitability

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This table compares Komatsu and Astec Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Komatsu 8.53% 11.93% 6.42%
Astec Industries 3.19% 5.43% 4.17%

Earnings & Valuation

This table compares Komatsu and Astec Industries’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Komatsu $16.68 billion 1.90 $1.05 billion $1.11 30.23
Astec Industries $1.18 billion 1.12 $37.79 million $1.58 36.31

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

Institutional & Insider Ownership

0.2% of Komatsu shares are held by institutional investors. Comparatively, 93.4% of Astec Industries shares are held by institutional investors. 1.7% of Astec Industries shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Komatsu has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Astec Industries has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Dividends

Komatsu pays an annual dividend of $0.26 per share and has a dividend yield of 0.8%. Astec Industries pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. Komatsu pays out 23.4% of its earnings in the form of a dividend. Astec Industries pays out 25.3% 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. Komatsu is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations for Komatsu and Astec Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Komatsu 0 0 0 0 N/A
Astec Industries 0 1 3 0 2.75

Astec Industries has a consensus target price of $67.00, indicating a potential upside of 16.79%. Given Astec Industries’ higher possible upside, analysts plainly believe Astec Industries is more favorable than Komatsu.

Summary

Komatsu beats Astec Industries on 9 of the 15 factors compared between the two stocks.

About Komatsu

Komatsu Ltd. is a provider of industrial-use products and services. The Company is engaged in the business of construction and mining equipment, industrial machinery and vehicles, logistics, electronics and other solutions-based operations. Its DANTOTSU service includes KOMTRAX, which is a machine tracking system whose terminals are installed on construction equipment to transmit information concerning the location, cumulative hours of operation and operating condition of vehicles, and KOMTRAX Plus, which is used in mining. Its DANTOTSU solutions include Autonomous Haulage System (AHS); intelligent Machine Control equipped; SMARTCONSTRUCTION, and intelligent Machine Control Hydraulic Excavators. Its other products include Forest Machines; Forklift Trucks; Diesel Engine Generators; large press system, and medium sized and small presses; Sheet-metal Machinery; Machine Tools; Excimer Lasers, and Thermoelectric modules and Temperature-control equipment for semiconductor manufacturing.

About Astec Industries

Astec Industries, Inc. designs, engineers, manufactures and markets equipment and components used primarily in road building and related construction activities. Its segments include Infrastructure Group, Aggregate and Mining Group and Energy Group. The Infrastructure Group segment is made up of five business units, including Astec, Inc., Roadtec, Inc., Carlson Paving Products, Inc., Astec Mobile Machinery GmbH and Astec Australia Pty Ltd. Its Aggregate and Mining Group consists of eight business units that are focused on designing and manufacturing heavy processing equipment, as well as servicing and supplying parts for the aggregate, metallic mining, recycling, ports and bulk handling markets. Its Energy Group includes five business units focused on supplying heavy equipment, such as heaters, drilling rigs, concrete plants, wood chippers and grinders, pump trailers, storage equipment and related parts to the oil and gas, construction and water well industries.

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