Caterpillar (NYSE: CAT) and Astec Industries (NASDAQ:ASTE) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, institutional ownership, earnings and risk.

Profitability

This table compares Caterpillar and Astec Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Caterpillar 7.04% 23.31% 4.10%
Astec Industries 4.08% 7.40% 5.64%

Analyst Ratings

This is a summary of current recommendations for Caterpillar and Astec Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Caterpillar 2 10 11 1 2.46
Astec Industries 0 1 1 0 2.50

Caterpillar presently has a consensus target price of $104.84, suggesting a potential downside of 11.36%. Astec Industries has a consensus target price of $85.00, suggesting a potential upside of 72.17%. Given Astec Industries’ stronger consensus rating and higher possible upside, analysts plainly believe Astec Industries is more favorable than Caterpillar.

Dividends

Caterpillar pays an annual dividend of $3.12 per share and has a dividend yield of 2.6%. Astec Industries pays an annual dividend of $0.40 per share and has a dividend yield of 0.8%. 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. Astec Industries pays out 19.0% of its earnings in the form of a dividend. Astec Industries has raised its dividend for 7 consecutive years.

Risk & Volatility

Caterpillar has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, Astec Industries has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.

Earnings and Valuation

This table compares Caterpillar and Astec Industries’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Caterpillar $39.89 billion 1.75 $5.84 billion $0.15 788.53
Astec Industries $1.19 billion 0.96 $100.27 million $2.10 23.51

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

Institutional and Insider Ownership

69.2% of Caterpillar shares are owned by institutional investors. Comparatively, 78.6% of Astec Industries shares are owned by institutional investors. 0.2% of Caterpillar shares are owned by company insiders. Comparatively, 1.7% of Astec Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Caterpillar beats Astec Industries on 10 of the 18 factors compared between the two stocks.

About Caterpillar

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.

About Astec Industries

Astec Industries, Inc. designs, engineers, manufactures and markets equipment and components used primarily in road building and related construction activities. Its segments include Infrastructure Group, Aggregate and Mining Group and Energy Group. The Infrastructure Group segment is made up of five business units, including Astec, Inc., Roadtec, Inc., Carlson Paving Products, Inc., Astec Mobile Machinery GmbH and Astec Australia Pty Ltd. Its Aggregate and Mining Group consists of eight business units that are focused on designing and manufacturing heavy processing equipment, as well as servicing and supplying parts for the aggregate, metallic mining, recycling, ports and bulk handling markets. Its Energy Group includes five business units focused on supplying heavy equipment, such as heaters, drilling rigs, concrete plants, wood chippers and grinders, pump trailers, storage equipment and related parts to the oil and gas, construction and water well industries.

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