Critical Contrast: Kubota (OTCMKTS:KUBTY) & AGCO (NYSE:AGCO)

Kubota (OTCMKTS:KUBTY) and AGCO (NYSE:AGCO) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Valuation & Earnings

This table compares Kubota and AGCO”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kubota	$19.95 billion	0.65	$1.52 billion	$5.62	10.01
AGCO	$11.66 billion	0.71	-$424.80 million	($7.80)	-14.21

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

Institutional and Insider Ownership

0.4% of Kubota shares are held by institutional investors. Comparatively, 78.8% of AGCO shares are held by institutional investors. 0.0% of Kubota shares are held by insiders. Comparatively, 16.9% of AGCO shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Kubota and AGCO, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kubota	0	2	0	0	2.00
AGCO	1	7	3	0	2.18

AGCO has a consensus target price of $105.40, suggesting a potential downside of 4.92%. Given AGCO’s stronger consensus rating and higher probable upside, analysts clearly believe AGCO is more favorable than Kubota.

Risk & Volatility

Kubota has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, AGCO has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kubota	6.71%	7.35%	3.36%
AGCO	-5.40%	10.60%	3.35%

Dividends

Kubota pays an annual dividend of $1.23 per share and has a dividend yield of 2.2%. AGCO pays an annual dividend of $1.16 per share and has a dividend yield of 1.0%. Kubota pays out 21.9% of its earnings in the form of a dividend. AGCO pays out -14.9% 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. AGCO has raised its dividend for 12 consecutive years.

Summary

AGCO beats Kubota on 10 of the 17 factors compared between the two stocks.

About Kubota

Kubota Corporation manufactures and sells agricultural and construction machinery in Japan, North America, Europe, Asia, and internationally. It operates through three segments: Farm & Machinery, Water & Environment, and Others. The Farm & Machinery segment offers tractors, power tillers, combine harvesters, rice transplanters, turf equipment, utility vehicles, other agricultural machinery, implements, attachments, post-harvest machinery, vegetable production equipment, intermediate management machine, and other equipment; cooperative drying, rice seedling, and gardening facilities; scales, weighing and measuring control systems, and air purifier; engines for farm equipment, construction machinery, industrial machinery, and generators; and mini excavators, wheel and skid steer loaders, compact track loaders, and other construction machinery related products. Its Water & Environment segment provides ductile iron pipes, synthetic pipes, valves, and single stack drain fittings, as well as design and construction services; reformer and cracking tubes, hearth rolls, TXAX materials, and spiral steel pipes; air-conditioning equipment; wastewater treatment equipment and plants, pumps and pump plants, membrane solutions, wastewater purification plants, night-soil treatment plants, waste incinerating and meltingplants, waste shredding and sorting plants, flue gas desulfurization apparatus, membrane methane fermentation plants, wastewater treatment plant, and valves. The Others segment offers logistics services; and roofing and exterior wall materials. It also engages in the underwriting of non-life insurance, retail financing, finance leasing, maintenance, security guarding, and facility management services; and import and export of components for farm equipment, engines, and construction machinery. It serves customers through a network of dealers. Kubota Corporation was founded in 1890 and is headquartered in Osaka, Japan.

About AGCO

AGCO Corporation manufactures and distributes agricultural equipment and related replacement parts worldwide. It offers horsepower tractors for row crop production, soil cultivation, planting, land leveling, seeding, and commercial hay operations; 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, equestrian, and residential uses. The company also provides grain storage bins and related drying and handling equipment systems; seed-processing systems; swine and poultry feed storage and delivery; ventilation and watering systems; and egg production systems and broiler production equipment. In addition, it offers 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, the company provides 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; planters and other planting equipment; and loaders. Additionally, it offers combines for harvesting grain crops, such as corn, wheat, soybeans, and rice; and application equipment, such as 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, as well as produces diesel engines, gears, and generating sets. The company markets its products under the Fendt, GSI, Massey Ferguson, Precision Planting, and Valtra brands through a network of independent dealers and distributors. AGCO Corporation was founded in 1990 and is headquartered in Duluth, Georgia.