Critical Review: AGCO Corporation (AGCO) versus Manitowoc Company, Inc. (The) (MTW)

AGCO Corporation (NYSE: AGCO) and Manitowoc Company, Inc. (The) (NYSE:MTW) are both industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Profitability

This table compares AGCO Corporation and Manitowoc Company, Inc. (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AGCO Corporation 2.40% 6.84% 2.67%
Manitowoc Company, Inc. (The) -14.63% -14.85% -5.70%

Volatility and Risk

AGCO Corporation has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, Manitowoc Company, Inc. (The) has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Earnings and Valuation

This table compares AGCO Corporation and Manitowoc Company, Inc. (The)’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AGCO Corporation $7.65 billion 0.78 $604.20 million $2.28 32.70
Manitowoc Company, Inc. (The) $1.43 billion 0.92 -$3.00 million ($1.51) -6.19

AGCO Corporation has higher revenue and earnings than Manitowoc Company, Inc. (The). Manitowoc Company, Inc. (The) is trading at a lower price-to-earnings ratio than AGCO Corporation, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

80.7% of AGCO Corporation shares are owned by institutional investors. Comparatively, 81.0% of Manitowoc Company, Inc. (The) shares are owned by institutional investors. 16.6% of AGCO Corporation shares are owned by insiders. Comparatively, 2.8% of Manitowoc Company, Inc. (The) shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for AGCO Corporation and Manitowoc Company, Inc. (The), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AGCO Corporation 2 10 3 0 2.07
Manitowoc Company, Inc. (The) 0 6 3 0 2.33

AGCO Corporation presently has a consensus price target of $67.83, suggesting a potential downside of 9.01%. Manitowoc Company, Inc. (The) has a consensus price target of $7.38, suggesting a potential downside of 21.03%. Given AGCO Corporation’s higher probable upside, equities analysts clearly believe AGCO Corporation is more favorable than Manitowoc Company, Inc. (The).

Dividends

AGCO Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. Manitowoc Company, Inc. (The) does not pay a dividend. AGCO Corporation pays out 24.6% of its earnings in the form of a dividend. AGCO Corporation has increased its dividend for 3 consecutive years.

Summary

AGCO Corporation beats Manitowoc Company, Inc. (The) on 10 of the 15 factors compared between the two stocks.

About AGCO Corporation

AGCO Corporation is a manufacturer and distributor of agricultural equipment and related replacement parts. The Company sells a range of agricultural equipment, including tractors, combines, self-propelled sprayers, hay tools, forage equipment, seeding and tillage equipment, implements, and grain storage and protein production systems. The Company’s segments are North America, South America, Europe/Middle East, and Asia/Pacific/Africa. The Company’s products are marketed under various brands, including Challenger, Fendt, GSI, Massey Ferguson and Valtra. As of December 31, 2016, the Company distributed its products through over 3,000 independent dealers and distributors in more than 150 countries. In addition, the Company also provides retail and wholesale financing through its finance joint ventures with Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank). The Company’s AGCO Power engines division produces diesel engines, gears and generating sets.

About Manitowoc Company, Inc. (The)

The Manitowoc Company, Inc. is a provider of engineered lifting equipment for the construction industry. The Company operates through the Crane business segment. It designs, manufactures and distributes a line of crawler-mounted lattice-boom cranes, which it sells under the Manitowoc brand name. It also designs and manufactures a line of top-slewing and self-erecting tower cranes, which it sells under the Potain brand name. It designs and manufactures mobile telescopic cranes, which it sells under the Grove brand name and a line of hydraulically powered telescopic boom trucks, which it sells under the National Crane brand name. It also provides crane product parts and services and crane rebuilding, remanufacturing and training services, which are delivered under the Manitowoc Crane Care brand name. Its crane products are used in a range of applications, including energy production/distribution and utilities, petrochemical and industrial projects, and infrastructure applications.

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