Reviewing Eastern (NASDAQ:EML) & Komatsu (OTCMKTS:KMTUY)

Komatsu (OTCMKTS:KMTUY) and Eastern (NASDAQ:EML) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Dividends

Komatsu pays an annual dividend of $0.89 per share and has a dividend yield of 2.3%. Eastern pays an annual dividend of $0.44 per share and has a dividend yield of 1.4%. Komatsu pays out 32.0% of its earnings in the form of a dividend. Eastern pays out 32.8% 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. Komatsu is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Komatsu and Eastern”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Komatsu	$27.45 billion	1.33	$2.48 billion	$2.78	14.11
Eastern	$248.97 million	0.76	$7.13 million	$1.34	23.45

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

Institutional and Insider Ownership

0.2% of Komatsu shares are held by institutional investors. Comparatively, 77.0% of Eastern shares are held by institutional investors. 2.9% of Komatsu shares are held by insiders. Comparatively, 18.4% of Eastern shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Komatsu and Eastern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Komatsu	8.92%	10.56%	5.94%
Eastern	3.44%	3.38%	1.89%

Analyst Recommendations

This is a breakdown of recent ratings for Komatsu and Eastern, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Komatsu	0	1	0	2	3.33
Eastern	0	2	0	0	2.00

Risk & Volatility

Komatsu has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500. Comparatively, Eastern has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500.

Summary

Komatsu beats Eastern on 12 of the 15 factors compared between the two stocks.

About Komatsu

Komatsu Ltd. is a Japanese manufacturer of construction, mining, utility and forestry equipment. Its products include excavators, bulldozers, wheel loaders, motor graders and mining trucks, along with machinery and services for forestry operations. The company also provides equipment maintenance, parts and technology solutions, including systems that support fleet management and automated operations. Founded in 1921 and headquartered in Tokyo, Komatsu has expanded from its origins as a Japanese industrial manufacturer into a global equipment and services provider.

About Eastern

The Eastern Company (NASDAQ: EML) is a diversified manufacturer of engineered products serving industrial, security and transportation markets. The company develops and produces products used in commercial vehicles, industrial equipment, specialty vehicles and other applications where security, access control and engineered components are required. Its product offerings include locks, latches, access hardware and other security-related components, as well as vehicle mirrors and related equipment.