Contrasting AGCO (AGCO) & Arcosa (ACA)

AGCO (NYSE:AGCO) and Arcosa (NYSE:ACA) are both industrial products companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Dividends

AGCO pays an annual dividend of $0.60 per share and has a dividend yield of 1.1%. Arcosa does not pay a dividend. AGCO pays out 19.9% of its earnings in the form of a dividend. AGCO has raised its dividend for 4 consecutive years.

Analyst Ratings

This is a summary of recent ratings for AGCO and Arcosa, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AGCO 1 11 3 0 2.13
Arcosa 0 0 2 0 3.00

AGCO currently has a consensus target price of $66.83, indicating a potential upside of 17.75%. Arcosa has a consensus target price of $43.50, indicating a potential upside of 65.21%. Given Arcosa’s stronger consensus rating and higher probable upside, analysts clearly believe Arcosa is more favorable than AGCO.

Profitability

This table compares AGCO and Arcosa’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AGCO 2.49% 9.70% 3.65%
Arcosa N/A N/A N/A

Insider & Institutional Ownership

85.7% of AGCO shares are owned by institutional investors. 16.6% of AGCO shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares AGCO and Arcosa’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AGCO $8.31 billion 0.53 $186.40 million $3.02 18.79
Arcosa N/A N/A N/A N/A N/A

AGCO has higher revenue and earnings than Arcosa.

Summary

AGCO beats Arcosa on 9 of the 12 factors compared between the two stocks.

AGCO Company Profile

AGCO Corporation manufactures and distributes agricultural equipment and related replacement parts worldwide. The company offers high horsepower tractors for larger farms, primarily for row crop production; utility tractors for small- and medium-sized farms, as well as for dairy, livestock, orchards, and vineyards; and compact tractors for small farms, specialty agricultural industries, landscaping, and residential uses. It also offers combines for harvesting grain crops, such as corn, wheat, soybeans, and rice; and application equipment, including self-propelled, three- and four-wheeled vehicles and related equipment for liquid and dry fertilizers and crop protection chemicals, and for after crops emerge from the ground. In addition, the company offers hay tools and forage equipment comprising round and rectangular balers, loader wagons, self-propelled windrowers, forage harvesters, disc mowers, spreaders, rakes, tedders, and mower conditioners for harvesting and packaging vegetative feeds used in the beef cattle, dairy, horse, and renewable fuel industries. Further, it offers implements, including disc harrows; leveling seed beds and mixing chemicals with the soils; heavy tillage to break up soil and mix crop residue into topsoil; field cultivators that prepare smooth seed bed and destroy weeds; drills for small grain seeding; and planters and other planting equipment, and loaders. Additionally, it offers grain storage bins and related drying and handling equipment systems, as well as seed-processing systems, swine and poultry feed storage and delivery, ventilation and watering systems, and egg production systems and broiler production equipment; and replacement parts, as well as produces diesel engines, gears, and generating sets. It markets its products under the Challenger, Fendt, GSI, Massey Ferguson, and Valtra brands through a network of independent dealers and distributors. AGCO Corporation was founded in 1990 and is headquartered in Duluth, Georgia.

Arcosa Company Profile

Arcosa, Inc. manufactures and sells infrastructure-related products and services for the construction, energy, and transportation markets. It operates through three segments: Construction Products Group, Energy Equipment Group, and Transportation Products Group. The Construction Products Group segment offers lightweight and natural construction aggregates, and trench shields and shoring products that are used in construction landscape, including commercial, industrial, road and bridge, and underground construction. It serves concrete producers; commercial, residential, industrial, and highway contractors; manufacturers of masonry products; state and local governments; and equipment rental dealers. The Energy Equipment Group segment provides structural wind towers for wind turbine producers; steel utility structures for electricity transmission and distribution; and pressurized and non-pressurized storage and distribution containers that store and transport various products, such as propane, anhydrous ammonia, and natural gas liquids. The Transportation Products Group segment offers hopper barges, tank barges, fiberglass covers, hatches, castings, and winches for commercial marine transportation companies and industrial shippers; axles, circular forgings, and coupling devices for freight, tank, locomotive, and passenger rail transportation equipment, as well as for other industrial uses; and cast components for use in the industrial and mining sectors. The company is headquartered in Dallas, Texas.

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