Head to Head Survey: Deere & Company (NYSE:DE) vs. Kubota (OTCMKTS:KUBTY)

Deere & Company (NYSE:DEGet Free Report) and Kubota (OTCMKTS:KUBTYGet Free Report) are both large-cap industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Institutional & Insider Ownership

68.6% of Deere & Company shares are held by institutional investors. Comparatively, 0.4% of Kubota shares are held by institutional investors. 0.3% of Deere & Company shares are held by insiders. Comparatively, 0.0% of Kubota shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Deere & Company pays an annual dividend of $6.48 per share and has a dividend yield of 1.3%. Kubota pays an annual dividend of $1.25 per share and has a dividend yield of 2.1%. Deere & Company pays out 31.3% of its earnings in the form of a dividend. Kubota pays out 24.9% 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. Deere & Company has increased its dividend for 4 consecutive years. Kubota is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Deere & Company has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500. Comparatively, Kubota has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Profitability

This table compares Deere & Company and Kubota’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Deere & Company 12.40% 24.39% 5.32%
Kubota 5.97% 6.57% 3.01%

Analyst Ratings

This is a breakdown of current ratings and target prices for Deere & Company and Kubota, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Deere & Company 0 11 8 1 2.50
Kubota 0 1 0 1 3.00

Deere & Company presently has a consensus price target of $523.9333, suggesting a potential upside of 2.03%. Given Deere & Company’s higher possible upside, equities analysts plainly believe Deere & Company is more favorable than Kubota.

Valuation & Earnings

This table compares Deere & Company and Kubota”s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Deere & Company $51.72 billion 2.69 $7.10 billion $20.67 24.84
Kubota $19.95 billion 0.70 $1.52 billion $5.03 12.03

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

Summary

Deere & Company beats Kubota on 14 of the 17 factors compared between the two stocks.

About Deere & Company

(Get Free Report)

Deere & Co. engages in the manufacture and distribution of equipment used in agriculture, construction, forestry, and turf care. It operates through the following segments: Agriculture and Turf, Construction and Forestry, and Financial Services. The Agriculture and Turf segment focuses on the distribution and manufacture of a full line of agriculture and turf equipment and related service parts. The Construction and Forestry segment offers machines and service parts used in construction, earthmoving, road building, material handling and timber harvesting. The Financial Services segment finances sales and leases by John Deere dealers of new and used agriculture and turf equipment and construction and forestry equipment. The company was founded by John Deere in 1837 and is headquartered in Moline, IL.

About Kubota

(Get Free Report)

Kubota Corporation manufactures and sells agricultural and construction machinery in Japan, North America, Europe, Asia, and internationally. It operates through three segments: Farm & Machinery, Water & Environment, and Others. The Farm & Machinery segment offers tractors, power tillers, combine harvesters, rice transplanters, turf equipment, utility vehicles, other agricultural machinery, implements, attachments, post-harvest machinery, vegetable production equipment, intermediate management machine, and other equipment; cooperative drying, rice seedling, and gardening facilities; scales, weighing and measuring control systems, and air purifier; engines for farm equipment, construction machinery, industrial machinery, and generators; and mini excavators, wheel and skid steer loaders, compact track loaders, and other construction machinery related products. Its Water & Environment segment provides ductile iron pipes, synthetic pipes, valves, and single stack drain fittings, as well as design and construction services; reformer and cracking tubes, hearth rolls, TXAX materials, and spiral steel pipes; air-conditioning equipment; wastewater treatment equipment and plants, pumps and pump plants, membrane solutions, wastewater purification plants, night-soil treatment plants, waste incinerating and meltingplants, waste shredding and sorting plants, flue gas desulfurization apparatus, membrane methane fermentation plants, wastewater treatment plant, and valves. The Others segment offers logistics services; and roofing and exterior wall materials. It also engages in the underwriting of non-life insurance, retail financing, finance leasing, maintenance, security guarding, and facility management services; and import and export of components for farm equipment, engines, and construction machinery. It serves customers through a network of dealers. Kubota Corporation was founded in 1890 and is headquartered in Osaka, Japan.

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