Analyzing Titan International (TWI) and Deere & Company (DE)

Titan International (NYSE: TWI) and Deere & Company (NYSE:DE) are both industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitabiliy, risk, valuation, analyst recommendations, institutional ownership and dividends.

Institutional and Insider Ownership

85.2% of Titan International shares are owned by institutional investors. Comparatively, 67.8% of Deere & Company shares are owned by institutional investors. 19.4% of Titan International shares are owned by insiders. Comparatively, 0.8% of Deere & Company shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Titan International and Deere & Company, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Titan International 1 0 4 0 2.60
Deere & Company 3 12 9 0 2.25

Titan International presently has a consensus price target of $14.50, suggesting a potential upside of 22.47%. Deere & Company has a consensus price target of $121.18, suggesting a potential downside of 4.58%. Given Titan International’s stronger consensus rating and higher possible upside, analysts clearly believe Titan International is more favorable than Deere & Company.

Dividends

Titan International pays an annual dividend of $0.02 per share and has a dividend yield of 0.2%. Deere & Company pays an annual dividend of $2.40 per share and has a dividend yield of 1.9%. Titan International pays out -2.8% of its earnings in the form of a dividend. Deere & Company pays out 43.2% 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.

Profitability

This table compares Titan International and Deere & Company’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Titan International -3.12% -11.22% -2.79%
Deere & Company 9.62% 44.35% 5.55%

Valuation & Earnings

This table compares Titan International and Deere & Company’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Titan International $1.30 billion 0.54 $42.13 million ($0.72) -16.44
Deere & Company $26.78 billion 1.52 $3.98 billion $5.55 22.88

Deere & Company has higher revenue and earnings than Titan International. Titan International is trading at a lower price-to-earnings ratio than Deere & Company, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Titan International has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500. Comparatively, Deere & Company has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Summary

Deere & Company beats Titan International on 9 of the 15 factors compared between the two stocks.

Titan International Company Profile

Titan International, Inc. is a wheel, tire, and undercarriage industrial manufacturer and supplier. The Company’s segments are agricultural, earthmoving/construction, and consumer. The Company produces a range of products to meet the specifications of original equipment manufacturers (OEMs) and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets. Its agricultural products include rims, wheels, tires, and undercarriage systems and components manufactured for use on various agricultural equipment. Its earthmoving/construction products include rims, wheels, tires, and undercarriage systems and components for various types of off-the-road (OTR) earthmoving, mining, military, construction, and forestry equipment. The Company’s consumer products include, but are not limited to, bias truck tires in Latin America and light truck tires in Russia, as well as products for all-terrain vehicles (ATVs), turf, and golf cart applications.

Deere & Company Company Profile

Deere & Company is engaged in equipment operations. The Company is engaged in providing financial services. The Company operates through three business segments: agriculture and turf, construction and forestry, and financial services. The agriculture and turf segment manufactures and distributes a line of agriculture and turf equipment and related service parts. The construction and forestry segment provides a line of construction equipment, and forestry machines and attachments available in the world. The construction and forestry segment is also engaged in providing fleet management telematics solutions. The financial services segment primarily finances sales and leases by the Company dealers of new and used agriculture and turf equipment and construction and forestry equipment. The financial services segment also provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts and offers extended equipment warranties.

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