Critical Contrast: CNH Global NV (CNH) & Alamo Group (ALG)

CNH Global NV (NYSE: CNH) and Alamo Group (NYSE:ALG) are both agricultural machinery companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Insider and Institutional Ownership

87.7% of Alamo Group shares are owned by institutional investors. 4.0% of Alamo Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for CNH Global NV and Alamo Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CNH Global NV 0 0 0 0 N/A
Alamo Group 0 1 1 0 2.50

Alamo Group has a consensus target price of $92.00, suggesting a potential downside of 17.17%.

Dividends

Alamo Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. CNH Global NV does not pay a dividend. Alamo Group pays out 9.6% of its earnings in the form of a dividend. Alamo Group has raised its dividend for 2 consecutive years.

Profitability

This table compares CNH Global NV and Alamo Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CNH Global NV N/A N/A N/A
Alamo Group 5.56% 12.11% 7.87%

Valuation & Earnings

This table compares CNH Global NV and Alamo Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
CNH Global NV N/A N/A N/A $5.40 N/A
Alamo Group $844.75 million 1.53 $40.04 million $4.17 26.64

Alamo Group has higher revenue and earnings than CNH Global NV. CNH Global NV is trading at a lower price-to-earnings ratio than Alamo Group, indicating that it is currently the more affordable of the two stocks.

Summary

Alamo Group beats CNH Global NV on 9 of the 11 factors compared between the two stocks.

CNH Global NV Company Profile

CNH Global N.V. (CNH) is a global, full-line company in both the agricultural and construction equipment industries. The Company organizes its operations into three business segments: agricultural equipment, construction equipment and financial services. The Company markets its products globally through its two brand families, Case and New Holland. Case IH (along with Steyr in Europe) and New Holland make up its agricultural brand family. Case and New Holland Construction (along with Kobelco in North America) make up its construction equipment brand family. During the year ended December 31, 2012, the Company was manufacturing its products in 37 facilities globally and distributing its products in approximately 170 countries through a network of approximately 11,500 dealers and distributors.

Alamo Group Company Profile

Alamo Group Inc. is engaged in the design and manufacture of agricultural equipment and infrastructure maintenance equipment for governmental and industrial use. The Company operates in Industrial, Agricultural and European segments. The Company’s products include tractor-mounted mowing and other vegetation maintenance equipment, street sweepers, excavators, vacuum trucks, snow removal equipment, pothole patchers, zero turn radius mowers, agricultural implements and related aftermarket. As of December 31, 2016, the Company operated 24 plants in North America, Europe, Australia and Brazil. The Company sells its products through a network of independent dealers and distributors to Governmental end users, related independent contractors, as well as to the agricultural and commercial turf markets. It also offers replacement parts for each of its wholegoods lines. The Company’s products are sold through various marketing organizations, and dealer and distributor networks.

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