Head to Head Survey: AGCO (NYSE:AGCO) and Parker-Hannifin (NYSE:PH)

Parker-Hannifin (NYSE:PH – Get Free Report) and AGCO (NYSE:AGCO – Get Free Report) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares Parker-Hannifin and AGCO’s net margins, return on equity and return on assets.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Parker-Hannifin and AGCO, as provided by MarketBeat.

Parker-Hannifin presently has a consensus price target of $1,114.55, suggesting a potential upside of 18.24%. AGCO has a consensus price target of $122.17, suggesting a potential upside of 1.85%. Given Parker-Hannifin’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Parker-Hannifin is more favorable than AGCO.

Institutional & Insider Ownership

82.4% of Parker-Hannifin shares are owned by institutional investors. Comparatively, 78.8% of AGCO shares are owned by institutional investors. 0.3% of Parker-Hannifin shares are owned by company insiders. Comparatively, 0.6% of AGCO shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Parker-Hannifin has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, AGCO has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Valuation & Earnings

This table compares Parker-Hannifin and AGCO”s gross revenue, earnings per share and valuation.

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

Dividends

Parker-Hannifin pays an annual dividend of $8.00 per share and has a dividend yield of 0.8%. AGCO pays an annual dividend of $1.20 per share and has a dividend yield of 1.0%. Parker-Hannifin pays out 28.1% of its earnings in the form of a dividend. AGCO pays out 16.6% 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. Parker-Hannifin has increased its dividend for 70 consecutive years and AGCO has increased its dividend for 12 consecutive years. AGCO is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Parker-Hannifin beats AGCO on 14 of the 17 factors compared between the two stocks.

About Parker-Hannifin

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Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. The company operates through two segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial segment offers sealing, shielding, thermal products and systems, adhesives, coatings, and noise vibration and harshness solutions; filters, systems, and diagnostics solutions to ensure purity and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors used in fluid and gas handling; and hydraulic, pneumatic, and electromechanical components and systems for builders and users of mobile and industrial machinery and equipment. This segment sells its products to original equipment manufacturers (OEMs) and distributors who serve the replacement markets in manufacturing, packaging, processing, transportation, construction, refrigeration and air conditioning, agricultural, and military machinery and equipment industries. The Aerospace Systems segment offers products for use in commercial and military airframe and engine programs, such as control actuation systems and components, engine build-up ducting, engine exhaust nozzles and assemblies, engine systems and components, fluid conveyance systems and components, fuel systems and components, fuel tank inerting systems, hydraulic systems and components, lubrication components, avionics, sensors, pneumatic control components, thermal management products, fire detection and suppression systems and components, and wheels and brakes, as well as fluid metering, delivery, and atomization devices. This segment markets its products directly to OEMs and end users. The company markets its products through direct-sales employees, independent distributors, and sales representatives. Parker-Hannifin Corporation was founded in 1917 and is headquartered in Cleveland, Ohio.

About AGCO

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AGCO Corporation manufactures and distributes agricultural equipment and related replacement parts worldwide. It offers horsepower tractors for row crop production, soil cultivation, planting, land leveling, seeding, and commercial hay operations; utility tractors for small- and medium-sized farms, as well as for dairy, livestock, orchards, and vineyards; and compact tractors for small farms, specialty agricultural industries, landscaping, equestrian, and residential uses. The company also provides grain storage bins and related drying and handling equipment systems; seed-processing systems; swine and poultry feed storage and delivery; ventilation and watering systems; and egg production systems and broiler production equipment. In addition, it offers round and rectangular balers, loader wagons, self-propelled windrowers, forage harvesters, disc mowers, spreaders, rakes, tedders, and mower conditioners for harvesting and packaging vegetative feeds used in the beef cattle, dairy, horse, and renewable fuel industries. Further, the company provides implements, including disc harrows leveling seed beds and mixing chemicals with the soils; heavy tillage to break up soil and mix crop residue into topsoil; field cultivators that prepare smooth seed bed and destroy weeds; drills for small grain seeding; planters and other planting equipment; and loaders. Additionally, it offers combines for harvesting grain crops, such as corn, wheat, soybeans, and rice; and application equipment, such as self-propelled, three- and four-wheeled vehicles, and related equipment for liquid and dry fertilizers and crop protection chemicals, and for after crops emerge from the ground, as well as produces diesel engines, gears, and generating sets. The company markets its products under the Fendt, GSI, Massey Ferguson, Precision Planting, and Valtra brands through a network of independent dealers and distributors. AGCO Corporation was founded in 1990 and is headquartered in Duluth, Georgia.