Caterpillar (CAT) and A.S.V. (ASV) Critical Analysis

Caterpillar (NYSE: CAT) and A.S.V. (NASDAQ:ASV) are both industrial products companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.

Dividends

Caterpillar pays an annual dividend of $3.12 per share and has a dividend yield of 2.0%. A.S.V. does not pay a dividend. Caterpillar pays out 45.3% of its earnings in the form of a dividend. Caterpillar has raised its dividend for 8 consecutive years.

Insider & Institutional Ownership

69.6% of Caterpillar shares are held by institutional investors. Comparatively, 43.0% of A.S.V. shares are held by institutional investors. 0.4% of Caterpillar shares are held by company insiders. Comparatively, 0.2% of A.S.V. shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Caterpillar and A.S.V.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Caterpillar 4.59% 34.38% 6.48%
A.S.V. 0.94% 3.21% 1.86%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Caterpillar and A.S.V., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Caterpillar 1 9 15 0 2.56
A.S.V. 0 0 3 0 3.00

Caterpillar currently has a consensus target price of $172.81, indicating a potential upside of 10.98%. A.S.V. has a consensus target price of $10.83, indicating a potential upside of 56.78%. Given A.S.V.’s stronger consensus rating and higher possible upside, analysts clearly believe A.S.V. is more favorable than Caterpillar.

Valuation & Earnings

This table compares Caterpillar and A.S.V.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Caterpillar $45.46 billion 2.05 $754.00 million $6.88 22.63
A.S.V. $123.34 million 0.55 $1.70 million $0.22 31.41

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

Summary

Caterpillar beats A.S.V. on 12 of the 16 factors compared between the two stocks.

Caterpillar Company Profile

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives for construction, resource, and energy and transportation industries. Its Construction Industries segment offers asphalt pavers, backhoe loaders, compactors, cold planers, compact truck and multi-terrain loaders, forestry excavators, feller bunchers, harvesters, knuckleboom loaders, motorgraders, pipelayers, road reclaimers, site prep tractors, skidders, skid steer loaders, telehandlers, track-type loaders, wheel excavators, and track-type tractors. The company's Resource Industries segment provides electric rope and hydraulic shovels, draglines, track and rotary drills, hard rock vehicles, large track-type vehicles, large mining trucks, longwall miners, large wheel loaders, off-highway trucks, articulated trucks, wheel tractor scrapers, wheel dozers, landfill compactors, soil compactors, machinery components, electronics and control systems, select work tools, and hard rock continuous mining systems. Its Energy & Transportation segment offers reciprocating engine powered generator sets; reciprocating engines; integrated systems used in the electric power generation industry; turbines, centrifugal gas compressors, and related services; integrated systems and solutions for the marine and oil and gas industries; remanufactured reciprocating engines and components; and diesel-electric locomotives and components, and other rail-related products and services. Its All Other operating segments manufactures filters and fluids, undercarriage, tires, rims, ground engaging tools, fluid transfer products, precision seals, and rubber sealing and connecting components; parts distribution; and digital investments services. The company was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. The company was founded in 1925 and is headquartered in Deerfield, Illinois.

A.S.V. Company Profile

ASV Holdings, Inc. designs and manufactures compact construction equipment in North America, Australia, and New Zealand. It offers compact track loader and skid steer loader equipment under the ASV and Terex brands. The company also offers private label original equipment manufacturing services; and pre-and post-sale dealer support, after-sale technical support, and replacement parts. ASV Holdings, Inc. offers its products primarily for use in the construction, agricultural, and forestry industries. The company was founded in 1983 and is headquartered in Grand Rapids, Minnesota.

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