Critical Analysis: Terex (TEX) versus CNH Industrial (CNHI)
Terex (NYSE: TEX) and CNH Industrial (NYSE:CNHI) are both mid-cap industrials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.
Insider & Institutional Ownership
96.9% of Terex shares are owned by institutional investors. Comparatively, 18.2% of CNH Industrial shares are owned by institutional investors. 2.5% of Terex shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Risk and Volatility
Terex has a beta of 1.88, indicating that its stock price is 88% more volatile than the S&P 500. Comparatively, CNH Industrial has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.
Earnings & Valuation
This table compares Terex and CNH Industrial’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Terex||$4.44 billion||0.92||-$176.10 million||($1.92)||-25.27|
|CNH Industrial||$24.87 billion||0.74||-$252.00 million||$0.32||42.35|
Terex has higher earnings, but lower revenue than CNH Industrial. Terex is trading at a lower price-to-earnings ratio than CNH Industrial, indicating that it is currently the more affordable of the two stocks.
Terex pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. CNH Industrial pays an annual dividend of $0.12 per share and has a dividend yield of 0.9%. Terex pays out -16.7% of its earnings in the form of a dividend. CNH Industrial pays out 37.5% 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. CNH Industrial has raised its dividend for 3 consecutive years. CNH Industrial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Terex and CNH Industrial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current recommendations and price targets for Terex and CNH Industrial, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Terex presently has a consensus price target of $43.58, indicating a potential downside of 10.16%. CNH Industrial has a consensus price target of $13.43, indicating a potential downside of 0.86%. Given CNH Industrial’s stronger consensus rating and higher possible upside, analysts clearly believe CNH Industrial is more favorable than Terex.
CNH Industrial beats Terex on 10 of the 17 factors compared between the two stocks.
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 CNH Industrial
CNH Industrial N.V. is a capital goods company. The Company is engaged in the design, production, marketing, sale and financing of agricultural and construction equipment, trucks, commercial vehicles, buses and specialty vehicles for firefighting, defense and other uses, as well as engines, transmissions and axles for vehicles and engines under marine and power generation applications. Its segments include Agricultural Equipment, which designs, manufactures and distributes farm machinery and implements; Construction Equipment, which designs, manufactures and distributes construction equipment; Commercial Vehicles, which designs, produces and sells a range of light, medium and heavy vehicles for the transportation and distribution of goods; Powertrain, which designs, manufactures and offers a range of propulsion and transmission systems, and axles for on- and off-road applications, and Financial Services, which offers a range of financial services to dealers and customers.
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