Deere & Company (NYSE: DE) and Parker-Hannifin (NYSE:PH) are both large-cap industrial products companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.
This is a breakdown of recent ratings and recommmendations for Deere & Company and Parker-Hannifin, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Deere & Company||1||6||12||0||2.58|
Valuation & Earnings
This table compares Deere & Company and Parker-Hannifin’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Deere & Company||$29.74 billion||1.61||$2.16 billion||$4.37||33.87|
|Parker-Hannifin||$12.03 billion||1.87||$983.41 million||$6.41||26.40|
Deere & Company has higher revenue and earnings than Parker-Hannifin. Parker-Hannifin is trading at a lower price-to-earnings ratio than Deere & Company, indicating that it is currently the more affordable of the two stocks.
Deere & Company pays an annual dividend of $2.40 per share and has a dividend yield of 1.6%. Parker-Hannifin pays an annual dividend of $2.64 per share and has a dividend yield of 1.6%. Deere & Company pays out 54.9% of its earnings in the form of a dividend. Parker-Hannifin pays out 41.2% 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.
Insider and Institutional Ownership
67.3% of Deere & Company shares are held by institutional investors. Comparatively, 81.6% of Parker-Hannifin shares are held by institutional investors. 0.7% of Deere & Company shares are held by insiders. Comparatively, 1.1% of Parker-Hannifin shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Deere & Company and Parker-Hannifin’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Deere & Company||4.57%||27.18%||3.76%|
Risk and Volatility
Deere & Company has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500. Comparatively, Parker-Hannifin has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500.
Parker-Hannifin beats Deere & Company on 9 of the 16 factors compared between the two stocks.
About Deere & Company
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.
Parker-Hannifin Corporation is a manufacturer of motion and control technologies and systems, providing precision engineered solutions for a range of mobile, industrial and aerospace markets. The Company operates through segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial Segment is an aggregation of several business units, which manufacture motion-control and fluid power system components for builders and users of various types of manufacturing, packaging, processing, transportation, agricultural, construction, and military vehicles and equipment. The Diversified Industrial Segment consists of Automation Group, Engineered Materials Group, Filtration Group, Fluid Connectors Group, Hydraulics Group and Instrumentation Group. The Aerospace Systems Segment produces hydraulic, fuel, pneumatic and electro-mechanical systems and components, which are utilized on domestic commercial, military and general aviation aircrafts.
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