AGCO (AGCO) and Oshkosh (OSK) Financial Contrast

AGCO (NYSE: AGCO) and Oshkosh (NYSE:OSK) are both mid-cap industrial products companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Institutional & Insider Ownership

82.6% of AGCO shares are owned by institutional investors. Comparatively, 93.6% of Oshkosh shares are owned by institutional investors. 16.6% of AGCO shares are owned by company insiders. Comparatively, 2.0% of Oshkosh shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

AGCO pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. Oshkosh pays an annual dividend of $0.96 per share and has a dividend yield of 1.1%. AGCO pays out 22.0% of its earnings in the form of a dividend. Oshkosh pays out 25.5% 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. AGCO has raised its dividend for 2 consecutive years and Oshkosh has raised its dividend for 3 consecutive years. Oshkosh is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for AGCO and Oshkosh, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AGCO 3 9 4 0 2.06
Oshkosh 0 4 10 0 2.71

AGCO currently has a consensus target price of $70.36, suggesting a potential downside of 1.60%. Oshkosh has a consensus target price of $92.75, suggesting a potential upside of 3.55%. Given Oshkosh’s stronger consensus rating and higher probable upside, analysts plainly believe Oshkosh is more favorable than AGCO.

Risk & Volatility

AGCO has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Oshkosh has a beta of 1.84, meaning that its share price is 84% more volatile than the S&P 500.

Profitability

This table compares AGCO and Oshkosh’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AGCO 2.59% 7.50% 2.90%
Oshkosh 4.18% 15.14% 6.54%

Valuation & Earnings

This table compares AGCO and Oshkosh’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AGCO $7.41 billion 0.77 $160.10 million $2.54 28.15
Oshkosh $6.83 billion 0.99 $285.60 million $3.76 23.82

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

Summary

Oshkosh beats AGCO on 13 of the 17 factors compared between the two stocks.

AGCO Company Profile

AGCO Corporation is a manufacturer and distributor of agricultural equipment and related replacement parts. The Company sells a range of agricultural equipment, including tractors, combines, self-propelled sprayers, hay tools, forage equipment, seeding and tillage equipment, implements, and grain storage and protein production systems. The Company’s segments are North America, South America, Europe/Middle East, and Asia/Pacific/Africa. The Company’s products are marketed under various brands, including Challenger, Fendt, GSI, Massey Ferguson and Valtra. As of December 31, 2016, the Company distributed its products through over 3,000 independent dealers and distributors in more than 150 countries. In addition, the Company also provides retail and wholesale financing through its finance joint ventures with Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank). The Company’s AGCO Power engines division produces diesel engines, gears and generating sets.

Oshkosh Company Profile

Oshkosh Corporation is a manufacturer and marketer of access equipment, specialty vehicles and truck bodies for the primary markets of defense, concrete placement, refuse hauling, access equipment, and fire and emergency. The company’s brands include Oshkosh, JLG, Pierce, McNeilus, IMT, Frontline, Jerr-Dan, CON-E-CO and London. The Company operates through four segments: Access equipment, Defense, Fire & emergency and Commercial. The Access equipment segment provides aerial work platforms and telehandlers to position workers and materials at elevated heights. The Defense segment provides supply parts and services and wheeled vehicles. The Fire & Emergency segment manufactures and markets commercial and custom fire vehicles, simulators and emergency vehicles. The Commercial segment manufactures, markets and distributes concrete mixers, portable concrete batch plants, and vehicle and vehicle body components.

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