CAT vs. ETN, DE, ABBNY, ITW, PH, CTAS, EMR, GWW, JCI, and FERG
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), Johnson Controls International (JCI), and Ferguson (FERG). 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 dividends, analyst recommendations, profitability, risk, earnings, media sentiment, valuation, institutional ownership and community ranking.
Caterpillar has a net margin of 16.79% compared to Eaton's net margin of 14.38%. Caterpillar's return on equity of 58.61% beat Eaton's return on equity.
In the previous week, Caterpillar had 8 more articles in the media than Eaton. MarketBeat recorded 25 mentions for Caterpillar and 17 mentions for Eaton. Eaton's average media sentiment score of 1.03 beat Caterpillar's score of 0.69 indicating that Eaton is being referred to more favorably in the news media.
Caterpillar currently has a consensus target price of $323.35, suggesting a potential downside of 9.24%. Eaton has a consensus target price of $314.27, suggesting a potential downside of 4.84%. Given Eaton's stronger consensus rating and higher possible upside, analysts clearly believe Eaton is more favorable than Caterpillar.
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 pays an annual dividend of $5.20 per share and has a dividend yield of 1.5%. Eaton pays an annual dividend of $3.76 per share and has a dividend yield of 1.1%. Caterpillar pays out 23.5% of its earnings in the form of a dividend. Eaton pays out 44.4% 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 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.
71.0% of Caterpillar shares are held by institutional investors. Comparatively, 83.0% of Eaton shares are held by institutional investors. 0.3% of Caterpillar shares are held by company insiders. Comparatively, 0.5% of Eaton shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Caterpillar has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Eaton has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.
Summary
Caterpillar beats Eaton on 11 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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