CAT vs. ETN, DE, ABBNY, ITW, PH, CTAS, EMR, GWW, FERG, and JCI
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), Ferguson (FERG), and Johnson Controls International (JCI). 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 better business? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, risk, analyst recommendations, media sentiment, earnings, community ranking and dividends.
Eaton presently has a consensus price target of $314.27, suggesting a potential downside of 4.88%. Caterpillar has a consensus price target of $323.35, suggesting a potential downside of 6.14%. Given Caterpillar's stronger consensus rating and higher probable upside, research 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.
In the previous week, Caterpillar had 18 more articles in the media than Eaton. MarketBeat recorded 39 mentions for Caterpillar and 21 mentions for Eaton. Caterpillar's average media sentiment score of 0.77 beat Eaton's score of 0.72 indicating that Eaton is being referred to more favorably in the media.
83.0% of Eaton shares are owned by institutional investors. Comparatively, 71.0% of Caterpillar shares are owned by institutional investors. 0.3% of Eaton shares are owned by company insiders. Comparatively, 0.3% of Caterpillar shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
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 Caterpillar's net margin of 14.38%. Eaton's return on equity of 58.61% beat Caterpillar's return on equity.
Eaton has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500. Comparatively, Caterpillar has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.
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.
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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