Head-To-Head Review: Terex (NYSE:TEX) & RBC Bearings (NYSE:RBC)

Terex (NYSE:TEX) and RBC Bearings (NYSE:RBC) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, dividends, institutional ownership and risk.

Volatility and Risk

Terex has a beta of 1.5, meaning that its stock price is 50% more volatile than the S&P 500. Comparatively, RBC Bearings has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500.

Profitability

This table compares Terex and RBC Bearings’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Terex	2.23%	12.24%	5.16%
RBC Bearings	16.40%	12.06%	7.78%

Earnings & Valuation

This table compares Terex and RBC Bearings”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Terex	$6.68 billion	1.00	$221.00 million	$1.96	29.94
RBC Bearings	$1.95 billion	7.76	$287.60 million	$10.12	47.36

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

Analyst Ratings

This is a summary of recent ratings for Terex and RBC Bearings, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Terex	0	5	5	2	2.75
RBC Bearings	0	2	8	0	2.80

Terex presently has a consensus price target of $78.91, suggesting a potential upside of 34.48%. RBC Bearings has a consensus price target of $617.38, suggesting a potential upside of 28.82%. Given Terex’s higher possible upside, equities analysts clearly believe Terex is more favorable than RBC Bearings.

Dividends

Terex pays an annual dividend of $0.68 per share and has a dividend yield of 1.2%. RBC Bearings pays an annual dividend of $1.32 per share and has a dividend yield of 0.3%. Terex pays out 34.7% of its earnings in the form of a dividend. RBC Bearings pays out 13.0% 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 5 consecutive years. Terex is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

92.9% of Terex shares are owned by institutional investors. 1.6% of Terex shares are owned by insiders. Comparatively, 1.8% of RBC Bearings shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

RBC Bearings beats Terex on 10 of the 18 factors compared between the two stocks.

About Terex

Terex Corporation manufactures and sells aerial work platforms and materials processing machinery worldwide. It operates in two segments, Materials Processing (MP) and Aerial Work Platforms (AWP). The MP segment designs, manufactures, services, and markets materials processing and specialty equipment, includes crushers, washing systems, screens, trommels, apron feeders, material handlers, pick and carry cranes, rough terrain cranes, tower cranes, wood processing, biomass and recycling equipment, concrete mixer trucks and concrete pavers, conveyors, and related components and replacement parts under the Terex, Powerscreen, Fuchs, EvoQuip, Canica, Cedarapids, CBI, Simplicity, Franna, Terex Ecotec, Finlay, ProAll, ZenRobotics, Terex Washing Systems, Terex MPS, Terex Jaques, Terex Advance, ProStack, Terex Bid-Well, MDS, and Terex Recycling Systems brands. Its products are used in construction, infrastructure, and recycling projects; quarrying and mining, and material handling applications; maintenance applications to lift equipment or material; and landscaping and biomass production industries. The AWP segment designs, manufactures, services, and markets aerial work platform equipment, utility equipment, and telehandlers under the Terex and Genie brands. Its products include portable material lifts, portable aerial work platforms, trailer-mounted articulating booms, self-propelled articulating and telescopic booms, and scissor lifts, as well as related components and replacement parts for construction and maintenance of industrial, commercial, institutional, and residential buildings and facilities, transmission and distribution lines, construction and foundation drilling applications, and other commercial operations, as well as in tree trimming and various infrastructure projects. The company offers financing solutions to assist customers in the rental, leasing, and acquisition of its products. Terex Corporation was founded in 1933 and is based in Norwalk, Connecticut.

About RBC Bearings

RBC Bearings Incorporated manufactures and markets engineered precision bearings, components, and systems in the United States and internationally. It operates through two segments, Aerospace/Defense and Industrial. The company produces plain bearings with self-lubricating or metal-to-metal designs, including rod end bearings, spherical plain bearings, and journal bearings; roller bearings, such as tapered roller bearings, needle roller bearings, and needle bearing track rollers and cam followers, which are anti-friction products that are used in industrial applications and military aircraft platforms; and ball bearings include high precision aerospace, airframe control, thin section, and industrial ball bearings that utilize high precision ball elements to reduce friction in high-speed applications. In addition, it offers mounted bearing products include mounted ball bearings, mounted roller bearings, and mounted plain bearings; and enclosed gearing product lines, including quantis gearmotor, torque arm, tigear, magnagear and maxum, and controlled start transmission. Further, the company's power transmission components include mechanical drive components, couplings, and conveyor components; engineered hydraulics and valves for aircraft and submarine applications, and aerospace and defense aftermarket services; fasteners; precision mechanical components, which are used in various general industrial applications; and machine tool collets that are used for holding circulars or rod-like pieces. It serves automotive, tool holding, agricultural and semiconductor machinery, commercial and defense aerospace, ground defense, construction and mining, oil and natural resource extraction, heavy truck, marine, rail and train, material handling, food and beverage, packaging and canning, wind, and general industrial markets through its direct sales force, and a network of industrial and aerospace distributors. The company was founded in 1919 and is based in Oxford, Connecticut.