Analyzing Alamo Group (ALG) and The Competition

Alamo Group (NYSE:ALG) is one of 437 public companies in the “Machinery” industry, but how does it compare to its rivals? We will compare Alamo Group to similar businesses based on the strength of its analyst recommendations, valuation, earnings, risk, dividends, profitability and institutional ownership.

Analyst Recommendations

This is a summary of current ratings and price targets for Alamo Group and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alamo Group	0	3	1	1	2.60
Alamo Group Competitors	4053	14446	17856	769	2.41

Alamo Group presently has a consensus price target of $188.00, indicating a potential upside of 10.84%. As a group, “Machinery” companies have a potential upside of 25.89%. Given Alamo Group’s rivals higher possible upside, analysts plainly believe Alamo Group has less favorable growth aspects than its rivals.

Profitability

This table compares Alamo Group and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alamo Group	6.08%	9.83%	6.86%
Alamo Group Competitors	-1,937.19%	-13.09%	0.75%

Institutional & Insider Ownership

92.4% of Alamo Group shares are owned by institutional investors. Comparatively, 52.6% of shares of all “Machinery” companies are owned by institutional investors. 1.1% of Alamo Group shares are owned by company insiders. Comparatively, 14.0% of shares of all “Machinery” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Alamo Group and its rivals gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Alamo Group	$1.60 billion	$103.80 million	20.34
Alamo Group Competitors	$4.45 billion	$346.97 million	-17.46

Alamo Group’s rivals have higher revenue and earnings than Alamo Group. Alamo Group is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

Alamo Group has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Alamo Group’s rivals have a beta of 4.49, meaning that their average share price is 349% more volatile than the S&P 500.

Dividends

Alamo Group pays an annual dividend of $1.36 per share and has a dividend yield of 0.8%. Alamo Group pays out 16.3% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.3% and pay out 27.3% of their earnings in the form of a dividend. Alamo Group has raised its dividend for 14 consecutive years.

Summary

Alamo Group beats its rivals on 8 of the 15 factors compared.

About Alamo Group

Alamo Group Inc. designs, manufactures, distributes, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural uses worldwide. It operates through two segments, Vegetation Management and Industrial Equipment. Its Vegetation Management Division segment offers hydraulically-powered and tractor – and off-road chassis mounted mowers, other cutters and replacement parts for heavy-duty and intensive uses and heavy duty, tractor- and truck-mounted mowing and vegetation maintenance equipment, and replacement parts. This segment also provides rotary and finishing mowers, flail and disc mowers, front-end loaders, backhoes, rotary tillers, posthole diggers, scraper blades and replacement parts, zero turn radius mowers, cutting parts, plain and hard-faced replacement tillage tools, disc blades, and fertilizer application components; aftermarket agricultural parts, heavy-duty mechanical rotary mowers, snow blowers, rock removal equipment, tractor attachments, agricultural implements, hydraulic and boom-mounted hedge and grass cutters, hedgerow cutters, industrial grass mowers, agricultural seedbed preparation cultivators, self-propelled sprayers and multi-drive load-carrying vehicles, and cutting blades. The company's Industrial Equipment Division segment offers truck-mounted air vacuum, mechanical broom, and regenerative air sweepers, pothole patchers, leaf collection equipment and replacement brooms, parking lot and street sweepers, excavators, catch basin cleaners, and roadway debris vacuum systems, as well as truck-mounted vacuum machines, combination sewer cleaners, and hydro excavators. This segment also offers ice control products, snowplows and heavy duty snow removal equipment, hitches, attachments, and graders; and public works and runway maintenance products, parts, and services, and high pressure cleaning systems and trenchers. The company was founded in 1955 and is headquartered in Seguin, Texas.