Caterpillar (NYSE:CAT) versus NN (NASDAQ:NNBR) Head-To-Head Contrast

Caterpillar (NYSE:CAT) and NN (NASDAQ:NNBR) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.

Analyst Ratings

This is a summary of current recommendations and price targets for Caterpillar and NN, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Caterpillar	0	12	15	0	2.56
NN	1	1	2	1	2.60

Caterpillar currently has a consensus target price of $947.42, suggesting a potential upside of 34.33%. NN has a consensus target price of $5.67, suggesting a potential upside of 65.98%. Given NN’s stronger consensus rating and higher possible upside, analysts clearly believe NN is more favorable than Caterpillar.

Insider and Institutional Ownership

71.0% of Caterpillar shares are owned by institutional investors. Comparatively, 53.9% of NN shares are owned by institutional investors. 0.3% of Caterpillar shares are owned by company insiders. Comparatively, 5.6% of NN shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Caterpillar	$67.59 billion	4.80	$8.88 billion	$23.24	30.35
NN	$422.21 million	0.76	-$34.00 million	($0.96)	-3.56

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

Volatility and Risk

Caterpillar has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500. Comparatively, NN has a beta of 2.65, meaning that its share price is 165% more volatile than the S&P 500.

Profitability

This table compares Caterpillar and NN’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Caterpillar	14.51%	55.53%	11.38%
NN	-6.21%	20.38%	1.49%

Summary

Caterpillar beats NN on 10 of the 15 factors compared between the two stocks.

About Caterpillar

Caterpillar Inc. manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in worldwide. Its Construction Industries segment offers asphalt pavers, compactors, road reclaimers, forestry machines, cold planers, material handlers, track-type tractors, excavators, telehandlers, motor graders, and pipelayers; compact track, wheel, track-type, backhoe, and skid steer loaders; and related parts and tools. The company's Resource Industries segment provides electric rope and hydraulic shovels, draglines, rotary drills, hard rock vehicles, tractors, mining trucks, wheel loaders, off-highway and articulated trucks, wheel tractor scrapers and dozers, fleet management products, landfill and soil compactors, machinery components, autonomous ready vehicles and solutions, work tools, and safety services and mining performance solutions, as well as related parts and services. Its Energy & Transportation segment offers reciprocating engine powered generator sets; reciprocating engines, drivetrain, and integrated systems and solutions; turbines, centrifugal gas compressors, and related services; and diesel-electric locomotives and components, and other rail-related products. The company's Financial Products segment provides operating and finance leases, installment sale contracts, revolving charge accounts, repair/rebuild financing services, working capital loans, and wholesale financing; and insurance and risk management products and services. Its All Other Operating segment offers filters and fluids, undercarriage, ground engaging tools, fluid transfer products, precision seals, and rubber sealing and connecting components; parts distribution; logistics solutions and distribution services; brand management and marketing strategy services; and digital investments services. Caterpillar Inc. was founded in 1925 and is headquartered in Irving, Texas.

About NN

NN, Inc., together with its subsidiaries, designs, manufactures, and sells high-precision components and assemblies for various end markets in the United States and internationally. It operates through two segments, Mobile Solutions and Power Solutions. The Mobile Solutions segment manufactures and sells system critical components for automotive, general industrial, and medical end markets for use in power steering, braking, transmissions, gasoline fuel system, diesel injection, and diesel emissions treatment applications, as well as in heating, ventilation, and air conditioning. The Power Solutions segment designs, manufactures, and sells a range of high-precision metal and plastic components, assemblies, and finished devices used in various applications, such as power control and transportation electrification. Its products include electrical contacts, connectors, contact assemblies, and precision stampings for the electrical, general industrial, automotive, aerospace and defense, and medical end markets. This segment also produces various tools and instruments for the orthopaedics and medical/surgical end markets. NN, Inc. was founded in 1980 and is headquartered in Charlotte, North Carolina.