Japan Steel Works (OTCMKTS:JPSWY) and Douglas Dynamics (NYSE:PLOW) Critical Comparison

Douglas Dynamics (NYSE:PLOW) and Japan Steel Works (OTCMKTS:JPSWY) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Valuation & Earnings

This table compares Douglas Dynamics and Japan Steel Works”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Douglas Dynamics	$699.10 million	1.30	$46.90 million	$2.20	17.88
Japan Steel Works	$1.83 billion	1.91	$126.98 million	$0.91	25.71

Japan Steel Works has higher revenue and earnings than Douglas Dynamics. Douglas Dynamics is trading at a lower price-to-earnings ratio than Japan Steel Works, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Douglas Dynamics and Japan Steel Works’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Douglas Dynamics	7.52%	19.03%	8.07%
Japan Steel Works	7.83%	8.17%	4.12%

Dividends

Douglas Dynamics pays an annual dividend of $1.18 per share and has a dividend yield of 3.0%. Japan Steel Works pays an annual dividend of $0.17 per share and has a dividend yield of 0.7%. Douglas Dynamics pays out 53.6% of its earnings in the form of a dividend. Japan Steel Works pays out 18.7% 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.

Analyst Recommendations

This is a breakdown of current ratings for Douglas Dynamics and Japan Steel Works, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Douglas Dynamics	0	2	2	1	2.80
Japan Steel Works	0	0	1	0	3.00

Douglas Dynamics presently has a consensus target price of $51.67, indicating a potential upside of 31.37%. Given Douglas Dynamics’ higher probable upside, equities analysts clearly believe Douglas Dynamics is more favorable than Japan Steel Works.

Insider and Institutional Ownership

91.8% of Douglas Dynamics shares are owned by institutional investors. 1.5% of Douglas Dynamics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Douglas Dynamics has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, Japan Steel Works has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500.

Summary

Douglas Dynamics beats Japan Steel Works on 10 of the 17 factors compared between the two stocks.

About Douglas Dynamics

Douglas Dynamics, Inc. operates as a manufacturer and upfitter of commercial work truck attachments and equipment in North America. It operates through two segments, Work Truck Attachments and Work Truck Solutions. The Work Truck Attachments segment manufactures and sells snow and ice control attachments, including snowplows, and sand and salt spreaders for light trucks and heavy duty trucks, as well as various related parts and accessories. The Work Truck Solutions segment primarily manufactures municipal snow and ice control products; provides truck and vehicle upfits where it attaches component pieces of equipment, truck bodies, racking, and storage solutions to a vehicle chassis for use by end users for work related purposes; and manufactures storage solutions for trucks and vans, and cable pulling equipment for trucks. This segment also offers up-fit and storage solutions. It also provides customized turnkey solutions to governmental agencies, such as Departments of Transportation and municipalities. The company sells its products under the FISHER, SNOWEX, WESTERN, TURFEX, SWEEPEX, HENDERSON, BRINEXTREME, and DEJANA brands. It distributes its products primarily to professional snowplowers who are contracted to remove snow and ice from commercial and residential areas. The company was founded in 1948 and is headquartered in Milwaukee, Wisconsin.

About Japan Steel Works

The Japan Steel Works, Ltd. engages in the provision of industrial machinery products, and material and engineering business in Japan and internationally. It operates through Industrial Machinery Products Business, and Material and Engineering Business segments. The Industrial Machinery Products Business segment offers plastic production and processing machinery, such as pelletizers, film and sheet manufacturing equipment, and twin-screw extruders; molding machines including plastic injection molding, magnesium injection molding, and blow molding machines; and other machinery consists of excimer laser annealing systems, defense equipment, railway products, hot press devices, vacuum laminators, and deposit systems, as well as after-sales services for plastics, mobility, high-performance batteries, electronic devices, and defense applications. The Material and Engineering Business segment provides steel casting and forgings, such as reactor and steam generator parts, rotor shafts, turbine casings, die steel, steel rolls for steel manufacturing, and clad steel plates; and engineering and other services, including design and analysis, welded structures, inspection and survey, and hydrogen pressure accumulators and related products for use in power generation equipment, renewable energy, and infrastructure applications. The company offers photonics, composite materials, and metallic materials for use in semiconductors and electronic devices, cameras and sensing devices, aircraft and mobility components, and electronic parts. The Japan Steel Works, Ltd. was founded in 1907 and is headquartered in Shinagawa, Japan.