Critical Comparison: Art’s-Way Manufacturing (NASDAQ:ARTW) & Komatsu (OTCMKTS:KMTUY)

Komatsu (OTCMKTS:KMTUY) and Art’s-Way Manufacturing (NASDAQ:ARTW) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Valuation and Earnings

This table compares Komatsu and Art’s-Way Manufacturing”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Komatsu	$27.45 billion	1.65	$2.48 billion	$2.73	17.86
Art’s-Way Manufacturing	$22.98 million	0.74	$1.03 million	($0.01)	-329.00

Komatsu has higher revenue and earnings than Art’s-Way Manufacturing. Art’s-Way Manufacturing is trading at a lower price-to-earnings ratio than Komatsu, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Komatsu has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Art’s-Way Manufacturing has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.

Insider & Institutional Ownership

0.2% of Komatsu shares are owned by institutional investors. Comparatively, 2.9% of Art’s-Way Manufacturing shares are owned by institutional investors. 2.9% of Komatsu shares are owned by company insiders. Comparatively, 51.5% of Art’s-Way Manufacturing shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Komatsu and Art’s-Way Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Komatsu	8.93%	10.51%	5.93%
Art’s-Way Manufacturing	-0.08%	-0.16%	-0.10%

Analyst Ratings

This is a breakdown of recent ratings for Komatsu and Art’s-Way Manufacturing, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Komatsu	0	1	0	2	3.33
Art’s-Way Manufacturing	1	0	0	0	1.00

Summary

Komatsu beats Art’s-Way Manufacturing on 11 of the 13 factors compared between the two stocks.

About Komatsu

Komatsu Ltd. manufactures and sells construction, mining, and utility equipment in Japan, the Americas, Europe, China, Rest of Asia, Oceania, the Middle East, Africa, and CIS countries. It operates through three segments: Construction, Mining and Utility Equipment; Retail Finance; and Industrial Machinery and Others. The company offers construction and mining equipment, including excavators, wheel loaders, bulldozers, motor graders, dump truck, rope and hybrid shovels, electric wheel loaders, continuous miners, and jumbo drills. It also provides forestry equipment, including harvesters, forwarders, feller bunchers, excavators, mini excavators, and forklifts; demolition, waste, and recycling equipment, such as mobile crushers, hydraulic excavators, wheel loaders, and mini shovels; material handling equipment; and tunnel-boring machines, pipe layers, towing tractors, and engines. In addition, the company offers industrial machinery, including presses, sheet-metal machinery, 3D laser cutting machine, transfer machines, battery manufacturing equipment, wire saws, thermos modules, thermoelectric generation module, and temperature control products; quarry equipment; agricultural and livestock equipment; EH sensor device; iron and steel casting products; and logistics equipment. Further, the company provides retail financing; construction machinery rental services; remanufactured products; other support services; transportation, warehousing, packing, and other services; and purchases and sells used equipment. Komatsu Ltd. was founded in 1884 and is headquartered in Tokyo, Japan.

About Art’s-Way Manufacturing

Art’s-Way Manufacturing Co., Inc. manufactures and distributes farm equipment products. It operates through the Agricultural Products, and Modular Buildings segments. The Agricultural Products segment manufactures a variety of specialized farm machinery under its own label including portable and stationary animal feed processing equipment and related attachments used to mill and mix feed grains into custom animal feed rations, a line of forage equipment consisting of forage boxes, bale processors, running gear, and dump boxes, a line of manure spreaders, sugar beet harvesting equipment, and a line of dirt work equipment. The Modular Buildings segment produces and sells modular buildings, which are custom designed to meet the specific research needs of its customers. It also provides services relating to the design, manufacturing, delivery, installation and renting of the building units that it produces. The company was founded by Arthur Luscombe in 1956 and is headquartered in Armstrong, IA.