Caterpillar (NYSE: CAT) and Columbus McKinnon Corporation (NASDAQ:CMCO) are both industrial products companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitabiliy, institutional ownership, earnings, risk, valuation, analyst recommendations and dividends.

Valuation and Earnings

This table compares Caterpillar and Columbus McKinnon Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Caterpillar $39.89 billion 1.69 $6.14 billion $0.15 762.27
Columbus McKinnon Corporation $691.84 million 1.04 $79.80 million $0.64 49.78

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

Institutional & Insider Ownership

70.5% of Caterpillar shares are owned by institutional investors. Comparatively, 84.3% of Columbus McKinnon Corporation shares are owned by institutional investors. 0.2% of Caterpillar shares are owned by company insiders. Comparatively, 3.9% of Columbus McKinnon Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Caterpillar pays an annual dividend of $3.12 per share and has a dividend yield of 2.7%. Columbus McKinnon Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. Caterpillar pays out 2,080.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Columbus McKinnon Corporation pays out 25.0% of its earnings in the form of a dividend. Caterpillar has increased its dividend for 7 consecutive years. Caterpillar is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Caterpillar and Columbus McKinnon Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Caterpillar 2 10 11 1 2.46
Columbus McKinnon Corporation 0 0 3 0 3.00

Caterpillar presently has a consensus target price of $105.95, suggesting a potential downside of 7.34%. Columbus McKinnon Corporation has a consensus target price of $33.67, suggesting a potential upside of 5.67%. Given Columbus McKinnon Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Columbus McKinnon Corporation is more favorable than Caterpillar.

Profitability

This table compares Caterpillar and Columbus McKinnon Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Caterpillar 0.27% 18.52% 3.42%
Columbus McKinnon Corporation 2.06% 10.30% 3.60%

Risk & Volatility

Caterpillar has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500. Comparatively, Columbus McKinnon Corporation has a beta of 1.92, indicating that its share price is 92% more volatile than the S&P 500.

Caterpillar Company Profile

Caterpillar Inc. is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The Company operates through segments, including Construction Industries, which is engaged in supporting customers using machinery in infrastructure, forestry and building construction; Resource Industries, which is engaged in supporting customers using machinery in mining, quarry, waste and material handling applications; Energy & Transportation, which supports customers in oil and gas, power generation, marine, rail and industrial applications, including Cat machines; Financial Products segment, which provides financing and related services, and All Other operating segments, which includes activities, such as product management and development, and manufacturing of filters and fluids, undercarriage, tires and rims, ground engaging tools, fluid transfer products, and sealing and connecting components for Cat products.

Columbus McKinnon Corporation Company Profile

Columbus McKinnon Corporation is a global designer, manufacturer and marketer of hoists, actuators, cranes, rigging tools, digital power control systems, and other material handling products serving various commercial and industrial end user markets. The Company’s products include various electric, air-powered, lever, and hand hoists, hoist trolleys, winches, industrial crane systems, such as steel bridge, gantry and jib cranes and aluminum work station cranes; alloy and carbon steel chain; forged attachments, such as hooks, shackles, textile slings, clamps, logging tools and load binders; mechanical and electromechanical actuators and rotary unions; below-the-hook special purpose lifters and tire shredders; power and motion control systems, such as alternate current (AC) and direct current (DC) drive systems, radio remote controls, push button pendant stations, brakes, and collision avoidance and power delivery subsystems.

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