Analyzing Columbus McKinnon (NASDAQ:CMCO) & DISCO (OTCMKTS:DSCSY)

DISCO (OTCMKTS:DSCSY) and Columbus McKinnon (NASDAQ:CMCO) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, risk, analyst recommendations, earnings and profitability.

Analyst Ratings

This is a summary of recent ratings for DISCO and Columbus McKinnon, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DISCO	0	1	0	0	2.00
Columbus McKinnon	0	1	0	0	2.00

Columbus McKinnon has a consensus price target of $35.00, indicating a potential upside of 115.52%. Given Columbus McKinnon’s higher probable upside, analysts plainly believe Columbus McKinnon is more favorable than DISCO.

Dividends

DISCO pays an annual dividend of $0.27 per share and has a dividend yield of 0.9%. Columbus McKinnon pays an annual dividend of $0.28 per share and has a dividend yield of 1.7%. DISCO pays out 36.5% of its earnings in the form of a dividend. Columbus McKinnon pays out -164.7% 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. Columbus McKinnon is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

0.0% of DISCO shares are held by institutional investors. Comparatively, 96.0% of Columbus McKinnon shares are held by institutional investors. 2.3% of Columbus McKinnon shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility & Risk

DISCO has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, Columbus McKinnon has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DISCO	31.51%	27.83%	20.48%
Columbus McKinnon	-0.53%	8.13%	4.10%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DISCO	$2.58 billion	12.07	$817.68 million	$0.74	38.85
Columbus McKinnon	$963.03 million	0.48	-$5.14 million	($0.17)	-95.53

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

Summary

DISCO beats Columbus McKinnon on 9 of the 14 factors compared between the two stocks.

About DISCO

Disco Corporation manufactures and sells precision cutting, grinding, and polishing machines in Japan and internationally. Its precision machines include dicing saws, laser saws, grinders, polishers, wafer mounters, die separators, surface planers, and waterjet saws. The company also offers precision processing tools, such as dicing blades, grinding wheels, and dry polishing wheels; and other products, such as accessory equipment. In addition, it is involved in the disassembly and recycling of precision cutting, grinding, and polishing machines, as well as provides training services for the maintenance and operation of its products. Further, the company leases precision machines; and purchases and sells used machines. Additionally, it manufactures precision diamond abrasive tools, as well as offers chargeable processing services. The company was founded in 1937 and is headquartered in Tokyo, Japan.

About Columbus McKinnon

Columbus McKinnon Corporation designs, manufactures, and markets motion solutions for moving, lifting, positioning, and securing materials worldwide. It offers manual, battery, electric, and air hoists; steel, rack, and pinion jacks; winches, hydraulic jacks and tools, trolleys and its clamps, and lifting tables; skates and heavy load moving systems; material handling equipment; mobile, workplace, and jib cranes; crane components and kits; and below-the-hook lifting devices, lifting slings, and lashing systems. The company also provides linear motion products, elevator and mining drives, brakes, radio controls, collision avoidance systems, regenerative drives, AC and DC drive and motor control systems, DC motor and magnet control systems, and conductor bar systems; and underfloor lifting systems, lifting jacks, roof working platforms, hybrid lifting systems, turntables, bogie axle exchange and lifting systems, bogie lift and turn devices, and workshop equipment. In addition, it offers fabric and modular belt, and sanitary, stainless steel conveyors; pallet systems; parts and belts; rotary unions and swivel joints; check valves; accumulation and transfer tables, motion control systems, and steel and flexible chains; hooks, shackles, textile slings, clamps, and load binders; actuators and rotary unions; and push button pendant stations, collision avoidance, and power delivery subsystems. It serves EV production and aerospace, energy and utilities, process industries, industrial automation, construction and infrastructure, food and beverage, entertainment, life sciences, consumer packaged goods, and e-commerce/supply chain/warehousing markets. It offers its products to end users directly, and through distributors, independent crane builders, material handling specialists and integrators, original equipment manufacturers, government agencies, and engineering procurement and construction firms. The company was founded in 1875 and is based in Charlotte, North Carolina.