Terex (NYSE: TEX) and Dover (NYSE:DOV) are both industrial products companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

Profitability

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This table compares Terex and Dover’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Terex 2.95% 8.80% 3.43%
Dover 10.37% 15.24% 6.10%

Institutional and Insider Ownership

97.8% of Terex shares are held by institutional investors. Comparatively, 88.2% of Dover shares are held by institutional investors. 2.5% of Terex shares are held by company insiders. Comparatively, 2.5% of Dover shares are held 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.

Dividends

Terex pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. Dover pays an annual dividend of $1.88 per share and has a dividend yield of 1.8%. Terex pays out 29.6% of its earnings in the form of a dividend. Dover pays out 36.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Terex has increased its dividend for 4 consecutive years and Dover has increased its dividend for 62 consecutive years. Dover is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Terex and Dover’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Terex $4.36 billion 0.72 $128.70 million $1.35 28.90
Dover $7.83 billion 2.03 $811.66 million $5.15 20.01

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

Volatility and Risk

Terex has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500. Comparatively, Dover has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Terex and Dover, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Terex 1 10 4 0 2.20
Dover 0 8 6 0 2.43

Terex presently has a consensus target price of $44.38, suggesting a potential upside of 13.75%. Dover has a consensus target price of $106.82, suggesting a potential upside of 3.64%. Given Terex’s higher possible upside, research analysts plainly believe Terex is more favorable than Dover.

Summary

Dover beats Terex on 11 of the 16 factors compared between the two stocks.

About Terex

Terex Corporation is a manufacturer of lifting and material processing products and services that deliver lifecycle solutions. The Company has three business segments: Aerial Work Platforms (AWP), Cranes and Materials Processing (MP). It delivers lifecycle solutions to a range of industries, including the construction, infrastructure, manufacturing, shipping, utility, quarrying and mining industries. The AWP segment designs, manufactures, services and markets aerial work platform equipment, telehandlers and light towers. The AWP segment’s products are used by its customers to construct and maintain industrial, commercial and residential buildings and facilities, and for other commercial operations, as well as in a range of infrastructure projects. The Cranes segment’s products are used by its customers for construction and manufacturing facilities, among others. The MP segment’s products are used by its customers in construction, infrastructure and recycling projects.

About Dover

Dover Corporation is a diversified global manufacturer delivering equipment and components, specialty systems, consumable supplies, software and digital solutions and support services. The Company’s segments include Energy, Engineered Systems, Fluids and Refrigeration & Food Equipment. The Company’s Energy segment is a provider of solutions and services for production and processing of fuels around the world. Its Engineered Systems segment includes two platforms: Printing & Identification, and Industrials and is focused on the design, manufacture and service of critical equipment and components serving the fast-moving consumer goods, digital textile printing and industrial end markets. Its Fluids segment is focused on the safe handling of critical fluids across the retail fueling, chemical, and industrial end markets. The Refrigeration & Food Equipment segment is a provider of energy efficient equipment and systems serving the commercial refrigeration and food equipment end markets.

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