Sandvik (OTCMKTS:SDVKY) and Kubota (OTCMKTS:KUBTY) Financial Contrast

Kubota (OTCMKTS:KUBTY) and Sandvik (OTCMKTS:SDVKY) are both large-cap industrials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitability, valuation and analyst recommendations.

Insider & Institutional Ownership

0.4% of Kubota shares are held by institutional investors. Comparatively, 0.7% of Sandvik shares are held by institutional investors. 0.0% of Kubota shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Kubota pays an annual dividend of $1.19 per share and has a dividend yield of 1.4%. Sandvik pays an annual dividend of $0.42 per share and has a dividend yield of 1.2%. Kubota pays out 15.7% of its earnings in the form of a dividend. Sandvik pays out 25.8% 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. Kubota is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations for Kubota and Sandvik, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kubota	2	1	0	1	2.00
Sandvik	1	6	5	0	2.33

Risk and Volatility

Kubota has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, Sandvik has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.

Valuation and Earnings

This table compares Kubota and Sandvik”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kubota	$20.19 billion	0.94	$1.25 billion	$7.59	10.96
Sandvik	$12.34 billion	3.54	$1.50 billion	$1.63	21.37

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

Profitability

This table compares Kubota and Sandvik’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kubota	8.18%	9.12%	4.27%
Sandvik	13.85%	20.30%	11.08%

Summary

Sandvik beats Kubota on 10 of the 16 factors compared between the two stocks.

About Kubota

Kubota Corporation manufactures and sells agricultural and construction machinery in Japan, North America, Europe, Asia, and internationally. It operates through three segments: Farm & Machinery, Water & Environment, and Others. The Farm & Machinery segment offers tractors, power tillers, combine harvesters, rice transplanters, turf equipment, utility vehicles, other agricultural machinery, implements, attachments, post-harvest machinery, vegetable production equipment, intermediate management machine, and other equipment; cooperative drying, rice seedling, and gardening facilities; scales, weighing and measuring control systems, and air purifier; engines for farm equipment, construction machinery, industrial machinery, and generators; and mini excavators, wheel and skid steer loaders, compact track loaders, and other construction machinery related products. Its Water & Environment segment provides ductile iron pipes, synthetic pipes, valves, and single stack drain fittings, as well as design and construction services; reformer and cracking tubes, hearth rolls, TXAX materials, and spiral steel pipes; air-conditioning equipment; wastewater treatment equipment and plants, pumps and pump plants, membrane solutions, wastewater purification plants, night-soil treatment plants, waste incinerating and meltingplants, waste shredding and sorting plants, flue gas desulfurization apparatus, membrane methane fermentation plants, wastewater treatment plant, and valves. The Others segment offers logistics services; and roofing and exterior wall materials. It also engages in the underwriting of non-life insurance, retail financing, finance leasing, maintenance, security guarding, and facility management services; and import and export of components for farm equipment, engines, and construction machinery. It serves customers through a network of dealers. Kubota Corporation was founded in 1890 and is headquartered in Osaka, Japan.

About Sandvik

Sandvik AB (publ), an engineering company, provides products and solutions for mining and rock excavation, metal cutting, and materials technology worldwide. The company offers mining and rock excavation equipment, including drill rigs and bolters, underground loaders and trucks, mechanical cutting equipment, rock tools and rock drills, and mining automation; rock processing equipment, such as crushers, screens, hydraulic breakers, demolition tools, and breaker booms. It also provides metal-cutting tools and tooling systems, and digital solutions and software; metal powder for additive manufacturing, and components made from controlled expansion alloys; and tungsten powders, as well as recycling services of secondary tungsten raw materials. The company serves aerospace, automotive, energy, general engineering, infrastructure, and mining industries. Sandvik AB (publ) was founded in 1862 and is headquartered in Stockholm, Sweden.