Arts-Way Manufacturing (NASDAQ:ARTW) and Alamo Group (NYSE:ALG) are both small-cap industrial products companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Valuation & Earnings

This table compares Arts-Way Manufacturing and Alamo Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arts-Way Manufacturing $20.72 million 0.44 -$1.63 million N/A N/A
Alamo Group $912.38 million 1.11 $44.31 million $4.63 18.69

Alamo Group has higher revenue and earnings than Arts-Way Manufacturing.

Volatility and Risk

Arts-Way Manufacturing has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, Alamo Group has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Arts-Way Manufacturing and Alamo Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arts-Way Manufacturing 0 0 0 0 N/A
Alamo Group 0 0 1 0 3.00

Alamo Group has a consensus price target of $104.00, indicating a potential upside of 20.18%. Given Alamo Group’s higher possible upside, analysts plainly believe Alamo Group is more favorable than Arts-Way Manufacturing.

Profitability

This table compares Arts-Way Manufacturing and Alamo Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arts-Way Manufacturing -13.46% -17.06% -11.23%
Alamo Group 6.04% 13.85% 9.19%

Institutional and Insider Ownership

3.6% of Arts-Way Manufacturing shares are held by institutional investors. Comparatively, 92.4% of Alamo Group shares are held by institutional investors. 45.3% of Arts-Way Manufacturing shares are held by insiders. Comparatively, 3.5% of Alamo Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Alamo Group pays an annual dividend of $0.44 per share and has a dividend yield of 0.5%. Arts-Way Manufacturing does not pay a dividend. Alamo Group pays out 9.5% of its earnings in the form of a dividend. Alamo Group has raised its dividend for 3 consecutive years.

Summary

Alamo Group beats Arts-Way Manufacturing on 12 of the 14 factors compared between the two stocks.

Arts-Way Manufacturing Company Profile

Art's-Way Manufacturing Co., Inc. manufactures and sells agricultural equipment, specialized modular science buildings, and steel cutting tools worldwide. The company operates through three segments: Agricultural Products, Modular Buildings, and Tools. The Agricultural Products segment offers specialized farm machineries, including portable and stationary animal feed processing equipment and related attachments; hay and forage equipment; portable grain augers; manure spreaders; sugar beet harvesting equipment; land maintenance equipment; moldboard plows; potato harvesters; reels for combines and swathers; silage blowers and reels; and after-market service parts under the Art's-Way, Miller Pro, Roda, M&W, Badger, and UHC by Art's-Way brands. The Modular Buildings segment produces and sells swine buildings and complex containment research laboratories, as well as research facilities for academic research institutions, government research and diagnostic centers, public health institutions, and private research and pharmaceutical companies. The Tools segment offers standard single point brazed carbide tipped tools, and polycrystalline diamond and cubic boron nitride inserts and tools. The company markets and sells its products through independent farm equipment dealers, manufacturers' representatives, direct sales, and original equipment manufacturer sales channels. Art's-Way Manufacturing Co., Inc. was founded in 1956 and is based in Armstrong, Iowa.

Alamo Group Company Profile

Alamo Group Inc. designs, manufactures, distributes, and services agricultural and infrastructure maintenance equipment for governmental and industrial use worldwide. It operates in three segments: Industrial, Agricultural, and European. The company offers hydraulically-powered and tractor-mounted mowers, including boom-mounted mowers; cutters for heavy-duty and intensive use applications; and heavy duty tractors-and truck-mounted mowing, and vegetation maintenance equipment and parts. It also provides truck-mounted air vacuum, mechanical broom, and regenerative air sweepers; pothole patchers; leaf collection equipment and replacement brooms; parking lot sweepers; excavators; catch basin cleaners and roadway debris vacuum systems; truck-mounted vacuum trucks, combination sewer cleaners, and hydro excavators; snow removal and ice control products; snow plows and heavy duty snow removal equipment, hitches, and attachments; and public works and runway maintenance products, parts, and services. In addition, the company offers rotary and finishing mowers, flail and disc mowers, front-end loaders, backhoes, rotary tillers, posthole diggers, and scraper blades, as well as self-propelled zero turn radius mowers; cutting parts, plain and hard-faced replacement tillage tools, disc blades, and fertilizer application components; aftermarket agricultural parts; heavy-duty mechanical rotary mowers, snow blowers, and rock removal equipment; and replacement parts. Further, it provides rotary mowers and tractor attachments; agricultural implements; hydraulic and boom-mounted hedge and grass cutters, as well as other tractor attachments and implements; hedgerow cutters, industrial grass mowers, and agricultural seedbed preparation cultivators; self-propelled sprayers and multi-drive load-carrying vehicles; cutting blades; hydraulic and mechanical boom mowers; and high pressure cleaning systems and trenchers. The company was founded in 1955 and is headquartered in Seguin, Texas.

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