Analyzing Douglas Dynamics (NYSE:PLOW) and Japan Steel Works (OTCMKTS:JPSWY)

Japan Steel Works (OTCMKTS:JPSWY) and Douglas Dynamics (NYSE:PLOW) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.

Analyst Ratings

This is a breakdown of current recommendations for Japan Steel Works and Douglas Dynamics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Japan Steel Works	0	0	1	0	3.00
Douglas Dynamics	0	2	2	1	2.80

Douglas Dynamics has a consensus target price of $51.67, indicating a potential upside of 31.37%. Given Douglas Dynamics’ higher probable upside, analysts plainly believe Douglas Dynamics is more favorable than Japan Steel Works.

Volatility & Risk

Japan Steel Works has a beta of 0.35, meaning that its stock price is 65% less volatile than the S&P 500. Comparatively, Douglas Dynamics has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.

Valuation and Earnings

This table compares Japan Steel Works and Douglas Dynamics”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Japan Steel Works	$1.83 billion	1.91	$126.98 million	$0.91	25.71
Douglas Dynamics	$699.10 million	1.30	$46.90 million	$2.20	17.88

Japan Steel Works has higher revenue and earnings than Douglas Dynamics. Douglas Dynamics is trading at a lower price-to-earnings ratio than Japan Steel Works, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

91.8% of Douglas Dynamics shares are held by institutional investors. 1.5% of Douglas Dynamics shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Japan Steel Works and Douglas Dynamics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Japan Steel Works	7.83%	8.17%	4.12%
Douglas Dynamics	7.52%	19.03%	8.07%

Dividends

Japan Steel Works pays an annual dividend of $0.17 per share and has a dividend yield of 0.7%. Douglas Dynamics pays an annual dividend of $1.18 per share and has a dividend yield of 3.0%. Japan Steel Works pays out 18.7% of its earnings in the form of a dividend. Douglas Dynamics pays out 53.6% 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.

Summary

Douglas Dynamics beats Japan Steel Works on 10 of the 17 factors compared between the two stocks.

About Japan Steel Works

The Japan Steel Works, Ltd. engages in the provision of industrial machinery products, and material and engineering business in Japan and internationally. It operates through Industrial Machinery Products Business, and Material and Engineering Business segments. The Industrial Machinery Products Business segment offers plastic production and processing machinery, such as pelletizers, film and sheet manufacturing equipment, and twin-screw extruders; molding machines including plastic injection molding, magnesium injection molding, and blow molding machines; and other machinery consists of excimer laser annealing systems, defense equipment, railway products, hot press devices, vacuum laminators, and deposit systems, as well as after-sales services for plastics, mobility, high-performance batteries, electronic devices, and defense applications. The Material and Engineering Business segment provides steel casting and forgings, such as reactor and steam generator parts, rotor shafts, turbine casings, die steel, steel rolls for steel manufacturing, and clad steel plates; and engineering and other services, including design and analysis, welded structures, inspection and survey, and hydrogen pressure accumulators and related products for use in power generation equipment, renewable energy, and infrastructure applications. The company offers photonics, composite materials, and metallic materials for use in semiconductors and electronic devices, cameras and sensing devices, aircraft and mobility components, and electronic parts. The Japan Steel Works, Ltd. was founded in 1907 and is headquartered in Shinagawa, Japan.

About Douglas Dynamics

Douglas Dynamics, Inc. operates as a manufacturer and upfitter of commercial work truck attachments and equipment in North America. It operates through two segments, Work Truck Attachments and Work Truck Solutions. The Work Truck Attachments segment manufactures and sells snow and ice control attachments, including snowplows, and sand and salt spreaders for light trucks and heavy duty trucks, as well as various related parts and accessories. The Work Truck Solutions segment primarily manufactures municipal snow and ice control products; provides truck and vehicle upfits where it attaches component pieces of equipment, truck bodies, racking, and storage solutions to a vehicle chassis for use by end users for work related purposes; and manufactures storage solutions for trucks and vans, and cable pulling equipment for trucks. This segment also offers up-fit and storage solutions. It also provides customized turnkey solutions to governmental agencies, such as Departments of Transportation and municipalities. The company sells its products under the FISHER, SNOWEX, WESTERN, TURFEX, SWEEPEX, HENDERSON, BRINEXTREME, and DEJANA brands. It distributes its products primarily to professional snowplowers who are contracted to remove snow and ice from commercial and residential areas. The company was founded in 1948 and is headquartered in Milwaukee, Wisconsin.