Comparing Toro (NYSE:TTC) and Kubota (OTCMKTS:KUBTY)

Kubota (OTCMKTS:KUBTY) and Toro (NYSE:TTC) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kubota	0	0	0	2	4.00
Toro	0	5	1	0	2.17

Toro has a consensus target price of $101.67, indicating a potential upside of 8.79%. Given Toro’s higher possible upside, analysts clearly believe Toro is more favorable than Kubota.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kubota	$20.19 billion	1.09	$1.25 billion	$7.59	12.75
Toro	$4.51 billion	1.97	$316.10 million	$3.47	26.93

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

Dividends

Kubota pays an annual dividend of $1.19 per share and has a dividend yield of 1.2%. Toro pays an annual dividend of $1.56 per share and has a dividend yield of 1.7%. Kubota pays out 15.7% of its earnings in the form of a dividend. Toro pays out 45.0% 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. Toro has raised its dividend for 21 consecutive years. Toro is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Kubota has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, Toro has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.

Insider and Institutional Ownership

0.4% of Kubota shares are held by institutional investors. Comparatively, 88.0% of Toro shares are held by institutional investors. 0.0% of Kubota shares are held by insiders. Comparatively, 1.9% of Toro shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Kubota and Toro’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kubota	8.18%	9.17%	4.26%
Toro	7.29%	31.13%	12.25%

Summary

Toro beats Kubota on 10 of the 18 factors compared between the two stocks.

About Kubota

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.

About Toro

The Toro Company designs, manufactures, markets, and sells professional turf maintenance equipment and services. It operates through two segments: Professional and Residential. The Professional segment offers turf and landscape equipment products, including sports fields and grounds mowing and maintenance equipment, golf course mowing and maintenance equipment, landscape contractor mowing equipment, landscape creation and renovation equipment, and other maintenance equipment; rental, specialty, and underground construction equipment, such as horizontal directional drills, walk and ride trenchers, stand-on skid steers, vacuum excavators, stump grinders, turf renovation products, asset locators, pipe rehabilitation solutions, materials handling equipment, and other after-market tools; and snow and ice management equipment, such as snowplows, as well as stand-on snow and ice removal equipment, such as snowplow, snow brush, and snow thrower attachments, salt and sand spreaders, and related parts and accessories for light and medium duty trucks, utility task vehicles, skid steers, and front-end loaders. This segment also provides irrigation and lighting products that consist of sprinkler heads, electric and hydraulic valves, controllers, computer irrigation central control systems, coupling systems, and ag-irrigation drip tape and hose products, as well as professionally installed landscape lighting products offered through distributors and landscape contractors. The Residential segment provides walk power mowers, zero-turn riding mowers, snow throwers, replacement parts, and home solution products that include grass and hedge trimmers, leaf blowers, blower-vacuums, chainsaws, string trimmers, hoses, and hose-end retail irrigation products. It sells its products through a network of distributors, dealers, mass retailers, hardware retailers, equipment rental centers, home centers, and online. The company was founded in 1914 and is headquartered in Bloomington, Minnesota.