Contrasting AGCO Corporation (AGCO) and Its Peers

AGCO Corporation (NYSE: AGCO) is one of 15 publicly-traded companies in the “Heavy Machinery & Vehicles” industry, but how does it contrast to its peers? We will compare AGCO Corporation to related companies based on the strength of its institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.

Valuation and Earnings

This table compares AGCO Corporation and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
AGCO Corporation $7.41 billion $160.10 million 26.33
AGCO Corporation Competitors $6.06 billion $48.37 million 167.69

AGCO Corporation has higher revenue and earnings than its peers. AGCO Corporation is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares AGCO Corporation and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AGCO Corporation 2.59% 7.50% 2.90%
AGCO Corporation Competitors 4.06% 13.41% 3.96%

Dividends

AGCO Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. AGCO Corporation pays out 22.0% of its earnings in the form of a dividend. As a group, “Heavy Machinery & Vehicles” companies pay a dividend yield of 1.3% and pay out 35.1% of their earnings in the form of a dividend. AGCO Corporation has increased its dividend for 3 consecutive years.

Insider & Institutional Ownership

80.9% of AGCO Corporation shares are held by institutional investors. Comparatively, 81.2% of shares of all “Heavy Machinery & Vehicles” companies are held by institutional investors. 16.6% of AGCO Corporation shares are held by insiders. Comparatively, 8.3% of shares of all “Heavy Machinery & Vehicles” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for AGCO Corporation and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AGCO Corporation 3 9 3 0 2.00
AGCO Corporation Competitors 170 875 950 17 2.40

AGCO Corporation presently has a consensus price target of $68.85, suggesting a potential upside of 2.92%. As a group, “Heavy Machinery & Vehicles” companies have a potential upside of 8.62%. Given AGCO Corporation’s peers stronger consensus rating and higher possible upside, analysts plainly believe AGCO Corporation has less favorable growth aspects than its peers.

Risk & Volatility

AGCO Corporation has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, AGCO Corporation’s peers have a beta of 1.44, indicating that their average share price is 44% more volatile than the S&P 500.

Summary

AGCO Corporation peers beat AGCO Corporation on 11 of the 15 factors compared.

AGCO Corporation 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.

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