Ampco-Pittsburgh (NYSE:AP) & Caterpillar (NYSE:CAT) Critical Comparison

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

Institutional & Insider Ownership

49.2% of Ampco-Pittsburgh shares are held by institutional investors. Comparatively, 71.0% of Caterpillar shares are held by institutional investors. 23.5% of Ampco-Pittsburgh shares are held by company insiders. Comparatively, 0.3% of Caterpillar shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Ampco-Pittsburgh has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500. Comparatively, Caterpillar has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500.

Profitability

This table compares Ampco-Pittsburgh and Caterpillar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ampco-Pittsburgh	-13.84%	-3.53%	-0.38%
Caterpillar	15.21%	59.87%	11.99%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ampco-Pittsburgh	$434.17 million	0.28	-$66.07 million	($2.93)	-2.04
Caterpillar	$77.77 billion	3.52	$8.88 billion	$25.49	23.47

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Ampco-Pittsburgh and Caterpillar, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ampco-Pittsburgh	1	0	0	0	1.00
Caterpillar	0	12	15	0	2.56

Caterpillar has a consensus target price of $898.25, indicating a potential upside of 50.12%. Given Caterpillar’s stronger consensus rating and higher possible upside, analysts clearly believe Caterpillar is more favorable than Ampco-Pittsburgh.

Summary

Caterpillar beats Ampco-Pittsburgh on 13 of the 14 factors compared between the two stocks.

About Ampco-Pittsburgh

Ampco-Pittsburgh Corporation, together with its subsidiaries, engages in manufacture and sale of specialty metal products and customized equipment to commercial and industrial users worldwide. The company operates through Forged and Cast Engineered Products (FCEP); and Air and Liquid Processing (ALP) segments. The FCEP segment produces forged hardened steel rolls, cast rolls and, forged engineered products that are used in cold rolling mills by producers of steel, aluminum, and other metals; cast rolls for hot strip mills, medium/heavy section mills, roughing mills, and plate mills; and forged engineered products for narrow and wide strip and aluminum mills, back-up rolls for narrow strip mills, and leveling rolls and shafts. The ALP segment produces custom-engineered finned tube heat exchange coils and related heat transfer products for various industries, including OEM/commercial, nuclear power generation, and industrial manufacturing; custom-designed air handling systems for institutional, pharmaceutical, and general industrial building markets; and manufacture centrifugal pumps for the fossil fueled power generation, marine defense, and industrial refrigeration industries. Ampco-Pittsburgh Corporation was incorporated in 1929 and is headquartered in Carnegie, Pennsylvania.

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.