Columbus McKinnon Corp. (CMCO) & Caterpillar (CAT) Critical Analysis
Columbus McKinnon Corp. (NASDAQ: CMCO) and Caterpillar (NYSE:CAT) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.
Institutional and Insider Ownership
84.1% of Columbus McKinnon Corp. shares are held by institutional investors. Comparatively, 70.3% of Caterpillar shares are held by institutional investors. 3.9% of Columbus McKinnon Corp. shares are held by insiders. Comparatively, 0.2% of Caterpillar shares are held by 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.
Risk and Volatility
Columbus McKinnon Corp. has a beta of 1.92, indicating that its stock price is 92% more volatile than the S&P 500. Comparatively, Caterpillar has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500.
This table compares Columbus McKinnon Corp. and Caterpillar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Columbus McKinnon Corp.||5.72%||13.26%||4.17%|
Valuation & Earnings
This table compares Columbus McKinnon Corp. and Caterpillar’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Columbus McKinnon Corp.||$691.84 million||1.05||$79.80 million||$0.64||50.17|
|Caterpillar||$39.89 billion||1.68||$5.84 billion||$0.15||758.07|
Caterpillar has higher revenue and earnings than Columbus McKinnon Corp.. Columbus McKinnon Corp. is trading at a lower price-to-earnings ratio than Caterpillar, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings for Columbus McKinnon Corp. and Caterpillar, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Columbus McKinnon Corp.||0||0||3||0||3.00|
Columbus McKinnon Corp. currently has a consensus target price of $33.67, indicating a potential upside of 4.85%. Caterpillar has a consensus target price of $105.95, indicating a potential downside of 6.82%. Given Columbus McKinnon Corp.’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Columbus McKinnon Corp. is more favorable than Caterpillar.
Columbus McKinnon Corp. pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. Caterpillar pays an annual dividend of $3.12 per share and has a dividend yield of 2.7%. Columbus McKinnon Corp. pays out 25.0% of its earnings in the form of a dividend. Caterpillar pays out 2,080.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Caterpillar has raised its dividend for 7 consecutive years. Caterpillar is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Columbus McKinnon Corp. Company Profile
Columbus McKinnon Corporation is a global designer, manufacturer and marketer of hoists, actuators, cranes, rigging tools, digital power control systems, and other material handling products serving various commercial and industrial end user markets. The Company’s products include various electric, air-powered, lever, and hand hoists, hoist trolleys, winches, industrial crane systems, such as steel bridge, gantry and jib cranes and aluminum work station cranes; alloy and carbon steel chain; forged attachments, such as hooks, shackles, textile slings, clamps, logging tools and load binders; mechanical and electromechanical actuators and rotary unions; below-the-hook special purpose lifters and tire shredders; power and motion control systems, such as alternate current (AC) and direct current (DC) drive systems, radio remote controls, push button pendant stations, brakes, and collision avoidance and power delivery subsystems.
Caterpillar Company Profile
Caterpillar Inc. is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The Company operates through segments, including Construction Industries, which is engaged in supporting customers using machinery in infrastructure, forestry and building construction; Resource Industries, which is engaged in supporting customers using machinery in mining, quarry, waste and material handling applications; Energy & Transportation, which supports customers in oil and gas, power generation, marine, rail and industrial applications, including Cat machines; Financial Products segment, which provides financing and related services, and All Other operating segments, which includes activities, such as product management and development, and manufacturing of filters and fluids, undercarriage, tires and rims, ground engaging tools, fluid transfer products, and sealing and connecting components for Cat products.
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