Analyzing Alamo Group (ALG) and Titan Machinery (TITN)
Alamo Group (NYSE: ALG) and Titan Machinery (NASDAQ:TITN) are both small-cap industrial products companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitabiliy, dividends, valuation and earnings.
Valuation and Earnings
This table compares Alamo Group and Titan Machinery’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alamo Group||$849.17 million||1.25||$91.84 million||$3.76||24.48|
|Titan Machinery||$1.19 billion||0.33||$25.00 million||($0.76)||-23.86|
Alamo Group has higher revenue, but lower earnings than Titan Machinery. Titan Machinery is trading at a lower price-to-earnings ratio than Alamo Group, indicating that it is currently the more affordable of the two stocks.
Alamo Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. Titan Machinery does not pay a dividend. Alamo Group pays out 10.6% of its earnings in the form of a dividend. Alamo Group has raised its dividend for 2 consecutive years.
This table compares Alamo Group and Titan Machinery’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
89.9% of Alamo Group shares are owned by institutional investors. Comparatively, 80.9% of Titan Machinery shares are owned by institutional investors. 4.0% of Alamo Group shares are owned by company insiders. Comparatively, 16.1% of Titan Machinery shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a summary of current recommendations for Alamo Group and Titan Machinery, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Alamo Group presently has a consensus price target of $85.00, indicating a potential downside of 7.67%. Titan Machinery has a consensus price target of $18.00, indicating a potential downside of 0.72%. Given Titan Machinery’s higher possible upside, analysts clearly believe Titan Machinery is more favorable than Alamo Group.
Risk and Volatility
Alamo Group has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Titan Machinery has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.
Alamo Group beats Titan Machinery on 9 of the 14 factors compared between the two stocks.
Alamo Group Company Profile
Alamo Group Inc. is engaged in the design and manufacture of agricultural equipment and infrastructure maintenance equipment for governmental and industrial use. The Company operates in Industrial, Agricultural and European segments. The Company’s products include tractor-mounted mowing and other vegetation maintenance equipment, street sweepers, excavators, vacuum trucks, snow removal equipment, pothole patchers, zero turn radius mowers, agricultural implements and related aftermarket. As of December 31, 2016, the Company operated 24 plants in North America, Europe, Australia and Brazil. The Company sells its products through a network of independent dealers and distributors to Governmental end users, related independent contractors, as well as to the agricultural and commercial turf markets. It also offers replacement parts for each of its wholegoods lines. The Company’s products are sold through various marketing organizations, and dealer and distributor networks.
Titan Machinery Company Profile
Titan Machinery Inc. owns and operates a network of service agricultural and construction equipment stores in the United States and Europe. The Company engages in four principal business activities: new and used equipment sales; parts sales; repair and maintenance services, and equipment rental and other activities. It has three business segments: Agriculture, Construction and International. Its agricultural equipment includes machinery and attachments for large-scale farming, and home and garden purposes. Its construction equipment includes heavy construction and light industrial machinery for commercial and residential construction, road and highway construction, and mining operations. It sells new agricultural and construction equipment. It provides in-store and on-site repair and maintenance services. It also rents equipment and provides ancillary services, such as equipment transportation, global positioning system signal subscriptions, and finance and insurance products.
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