Head-To-Head Review: Toro (NYSE:TTC) vs. Snap-On (NYSE:SNA)

Toro (NYSE:TTC) and Snap-On (NYSE:SNA) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Profitability

This table compares Toro and Snap-On’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toro	8.77%	27.99%	11.60%
Snap-On	21.42%	18.60%	12.78%

Dividends

Toro pays an annual dividend of $1.52 per share and has a dividend yield of 2.0%. Snap-On pays an annual dividend of $8.56 per share and has a dividend yield of 2.7%. Toro pays out 39.0% of its earnings in the form of a dividend. Snap-On pays out 44.8% 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. Toro has increased its dividend for 21 consecutive years and Snap-On has increased its dividend for 15 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Toro and Snap-On, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toro	0	4	1	0	2.20
Snap-On	1	1	4	0	2.50

Toro currently has a consensus price target of $82.75, indicating a potential upside of 11.01%. Snap-On has a consensus price target of $350.83, indicating a potential upside of 9.36%. Given Toro’s higher probable upside, equities research analysts plainly believe Toro is more favorable than Snap-On.

Valuation and Earnings

This table compares Toro and Snap-On”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toro	$4.58 billion	1.60	$418.90 million	$3.90	19.11
Snap-On	$5.11 billion	3.28	$1.04 billion	$19.10	16.80

Snap-On has higher revenue and earnings than Toro. Snap-On is trading at a lower price-to-earnings ratio than Toro, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

88.0% of Toro shares are owned by institutional investors. Comparatively, 84.9% of Snap-On shares are owned by institutional investors. 0.4% of Toro shares are owned by insiders. Comparatively, 3.9% of Snap-On shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Toro has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500. Comparatively, Snap-On has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Summary

Snap-On beats Toro on 10 of the 17 factors compared between the two stocks.

About Toro

The Toro Company designs, manufactures, markets, and sells professional turf maintenance equipment and services. It operates through two segments: Professional and Residential. The Professional segment offers turf and landscape equipment products, including sports fields and grounds mowing and maintenance equipment, golf course mowing and maintenance equipment, landscape contractor mowing equipment, landscape creation and renovation equipment, and other maintenance equipment; rental, specialty, and underground construction equipment, such as horizontal directional drills, walk and ride trenchers, stand-on skid steers, vacuum excavators, stump grinders, turf renovation products, asset locators, pipe rehabilitation solutions, materials handling equipment, and other after-market tools; and snow and ice management equipment, such as snowplows, as well as stand-on snow and ice removal equipment, such as snowplow, snow brush, and snow thrower attachments, salt and sand spreaders, and related parts and accessories for light and medium duty trucks, utility task vehicles, skid steers, and front-end loaders. This segment also provides irrigation and lighting products that consist of sprinkler heads, electric and hydraulic valves, controllers, computer irrigation central control systems, coupling systems, and ag-irrigation drip tape and hose products, as well as professionally installed landscape lighting products offered through distributors and landscape contractors. The Residential segment provides walk power mowers, zero-turn riding mowers, snow throwers, replacement parts, and home solution products that include grass and hedge trimmers, leaf blowers, blower-vacuums, chainsaws, string trimmers, hoses, and hose-end retail irrigation products. It sells its products through a network of distributors, dealers, mass retailers, hardware retailers, equipment rental centers, home centers, and online. The company was founded in 1914 and is headquartered in Bloomington, Minnesota.

About Snap-On

Snap-on Incorporated manufactures and markets tools, equipment, diagnostics, and repair information and systems solutions for professional users worldwide. It operates through Commercial & Industrial Group, Snap-on Tools Group, Repair Systems & Information Group, and Financial Services segments. The company provides hand tools, including wrenches, sockets, ratchet wrenches, pliers, screwdrivers, punches and chisels, saws and cutting tools, pruning tools, torque measuring instruments, and other related products; power tools, such as cordless, pneumatic, and hydraulic and corded tools; and tool storage products comprising tool chests, roll cabinets, and other products. It provides handheld and computer-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer purchasing facilitation services, and warranty management systems and analytics; and engineered solutions. In addition, the company offers solutions for the service of vehicles and industrial equipment that include wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane equipment, collision repair equipment, vehicle air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers, and hoists, as well as after-sales support services and training programs. Further, it provides financing programs to facilitate the sales of its products and support its franchise business. It serves the aviation and aerospace, agriculture, infrastructure construction, government and military, mining, natural resources, power generation, and technical education industries. Snap-on Incorporated was incorporated in 1920 and is headquartered in Kenosha, Wisconsin.