Comparing Caterpillar (NYSE:CAT) and Toyota Industries (OTCMKTS:TYIDY)

Toyota Industries (OTCMKTS:TYIDY) and Caterpillar (NYSE:CAT) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Insider and Institutional Ownership

0.5% of Toyota Industries shares are held by institutional investors. Comparatively, 71.0% of Caterpillar shares are held by institutional investors. 0.3% of Caterpillar shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Toyota Industries and Caterpillar, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toyota Industries	0	0	0	0	N/A
Caterpillar	1	9	8	0	2.39

Caterpillar has a consensus price target of $307.56, suggesting a potential downside of 15.39%. Given Caterpillar’s higher possible upside, analysts plainly believe Caterpillar is more favorable than Toyota Industries.

Valuation and Earnings

This table compares Toyota Industries and Caterpillar’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toyota Industries	N/A	N/A	N/A	$347.86	0.27
Caterpillar	$67.06 billion	2.71	$10.34 billion	$20.14	18.05

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Toyota Industries	N/A	N/A	N/A
Caterpillar	15.41%	56.99%	12.69%

Dividends

Toyota Industries pays an annual dividend of $96.65 per share and has a dividend yield of 102.3%. Caterpillar pays an annual dividend of $5.20 per share and has a dividend yield of 1.4%. Toyota Industries pays out 27.8% of its earnings in the form of a dividend. Caterpillar pays out 25.8% 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. Caterpillar has increased its dividend for 29 consecutive years.

Summary

Caterpillar beats Toyota Industries on 11 of the 13 factors compared between the two stocks.

About Toyota Industries

Toyota Industries Corporation manufactures and sells textile machinery, materials handling equipment, automobiles, and automobile parts in Japan and internationally. The company operates through Automobile, Materials Handling Equipment, and Textile Machinery segments. It provides vehicles; gasoline and diesel engines for automobiles and industrial equipment; turbochargers and foundry parts; car air-conditioning compressors; car electronics comprising DC-DC converters, rear inverters, on-board chargers, DC-AC inverters, and charging and discharging systems; batteries; and stamping dies, including automotive and lift truck stamping dies. The company also offers counterbalanced lift trucks, electric reach trucks, skid steer loaders, tow tractors, and electric tow tractors; stationary/fixed type racks, nesting pallets, mobile racks, and automated storage and retrieval systems; and automatic guided vehicle systems, high speed rail guided vehicle systems, and automatic guided lift and pallet trucks. It provides spinning machines, such as ring spinning and roving frames; weaving machinery; and cotton classing and yarn testing instruments, as well as leases materials handling systems and industrial equipment. The company also offers aerial work platforms; in-house transporters; software; and funding, loan, and other financial services. It is involved in the operation of sports facility and nursing homes; real estate leasing; trucking, warehousing, distribution consulting; building management, construction, and real estate; travel agency, renovation, sale of tube amplifiers, and organizing and running of events; personnel placement, contract office staffing, and patent investigation; management and operation of employee clubs and restaurant management; administrative processing for payroll accounting; and contract manufacturing of electronic devices, as well as sale of hardware. Toyota Industries Corporation was incorporated in 1926 and is headquartered in Kariya, Japan.

About Caterpillar

Caterpillar Inc. manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in worldwide. Its Construction Industries segment offers asphalt pavers, compactors, road reclaimers, forestry machines, cold planers, material handlers, track-type tractors, excavators, telehandlers, motor graders, and pipelayers; compact track, wheel, track-type, backhoe, and skid steer loaders; and related parts and tools. The company's Resource Industries segment provides electric rope and hydraulic shovels, draglines, rotary drills, hard rock vehicles, tractors, mining trucks, wheel loaders, off-highway and articulated trucks, wheel tractor scrapers and dozers, fleet management products, landfill and soil compactors, machinery components, autonomous ready vehicles and solutions, work tools, and safety services and mining performance solutions, as well as related parts and services. Its Energy & Transportation segment offers reciprocating engine powered generator sets; reciprocating engines, drivetrain, and integrated systems and solutions; turbines, centrifugal gas compressors, and related services; and diesel-electric locomotives and components, and other rail-related products. The company's Financial Products segment provides operating and finance leases, installment sale contracts, revolving charge accounts, repair/rebuild financing services, working capital loans, and wholesale financing; and insurance and risk management products and services. Its All Other Operating segment offers filters and fluids, undercarriage, ground engaging tools, fluid transfer products, precision seals, and rubber sealing and connecting components; parts distribution; logistics solutions and distribution services; brand management and marketing strategy services; and digital investments services. Caterpillar Inc. was founded in 1925 and is headquartered in Irving, Texas.