CAT vs. ETN, DE, ABBNY, ITW, PH, CTAS, GWW, JCI, FERG, and ASTE
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), W.W. Grainger (GWW), Johnson Controls International (JCI), Ferguson (FERG), and Astec Industries (ASTE). These companies are all part of the "industrial products" sector.
Caterpillar (NYSE:CAT) and Eaton (NYSE:ETN) are both large-cap industrial products companies, but which is the superior stock? We will contrast the two businesses based on the strength of their media sentiment, community ranking, risk, analyst recommendations, dividends, profitability, valuation, institutional ownership and earnings.
71.0% of Caterpillar shares are owned by institutional investors. Comparatively, 83.0% of Eaton shares are owned by institutional investors. 0.3% of Caterpillar shares are owned by insiders. Comparatively, 0.5% of Eaton shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Caterpillar presently has a consensus target price of $323.35, indicating a potential downside of 2.33%. Eaton has a consensus target price of $302.93, indicating a potential downside of 2.92%. Given Caterpillar's higher probable upside, analysts clearly believe Caterpillar is more favorable than Eaton.
Caterpillar has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Eaton has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.
In the previous week, Caterpillar had 35 more articles in the media than Eaton. MarketBeat recorded 73 mentions for Caterpillar and 38 mentions for Eaton. Eaton's average media sentiment score of 0.83 beat Caterpillar's score of 0.47 indicating that Eaton is being referred to more favorably in the news media.
Caterpillar received 285 more outperform votes than Eaton when rated by MarketBeat users. However, 66.62% of users gave Eaton an outperform vote while only 62.49% of users gave Caterpillar an outperform vote.
Caterpillar pays an annual dividend of $5.20 per share and has a dividend yield of 1.6%. Eaton pays an annual dividend of $3.76 per share and has a dividend yield of 1.2%. Caterpillar pays out 23.5% of its earnings in the form of a dividend. Eaton pays out 46.9% 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. Caterpillar is clearly the better dividend stock, given its higher yield and lower payout ratio.
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.
Caterpillar has a net margin of 16.79% compared to Eaton's net margin of 13.88%. Caterpillar's return on equity of 58.61% beat Eaton's return on equity.
Summary
Caterpillar beats Eaton on 12 of the 20 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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