Critical Review: Deere & (DE) & Titan Machinery (TITN)
Deere & (NYSE: DE) and Titan Machinery (NASDAQ:TITN) are both industrial products companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, risk, earnings, profitability, valuation, dividends and institutional ownership.
Risk and Volatility
Deere & has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Titan Machinery has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500.
Insider & Institutional Ownership
67.4% of Deere & shares are owned by institutional investors. Comparatively, 81.2% of Titan Machinery shares are owned by institutional investors. 0.9% of Deere & shares are owned by insiders. Comparatively, 16.1% of Titan Machinery shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This is a summary of current ratings and target prices for Deere & and Titan Machinery, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Deere & presently has a consensus price target of $122.99, indicating a potential downside of 2.93%. Titan Machinery has a consensus price target of $18.00, indicating a potential upside of 8.11%. Given Titan Machinery’s stronger consensus rating and higher probable upside, analysts plainly believe Titan Machinery is more favorable than Deere &.
This table compares Deere & and Titan Machinery’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Deere & pays an annual dividend of $2.40 per share and has a dividend yield of 1.9%. Titan Machinery does not pay a dividend. Deere & pays out 43.2% of its earnings in the form of a dividend.
Valuation & Earnings
This table compares Deere & and Titan Machinery’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Deere &||$26.78 billion||1.51||$3.98 billion||$5.55||22.83|
|Titan Machinery||$1.19 billion||0.30||$25.00 million||($0.76)||-21.91|
Deere & has higher revenue and earnings than Titan Machinery. Titan Machinery is trading at a lower price-to-earnings ratio than Deere &, indicating that it is currently the more affordable of the two stocks.
Deere & beats Titan Machinery on 9 of the 15 factors compared between the two stocks.
About Deere &
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.
About Titan Machinery
Titan Machinery Inc. owns and operates a network of service agricultural and construction equipment stores in the United States and Europe. The Company engages in four principal business activities: new and used equipment sales; parts sales; repair and maintenance services, and equipment rental and other activities. It has three business segments: Agriculture, Construction and International. Its agricultural equipment includes machinery and attachments for large-scale farming, and home and garden purposes. Its construction equipment includes heavy construction and light industrial machinery for commercial and residential construction, road and highway construction, and mining operations. It sells new agricultural and construction equipment. It provides in-store and on-site repair and maintenance services. It also rents equipment and provides ancillary services, such as equipment transportation, global positioning system signal subscriptions, and finance and insurance products.
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