Critical Analysis: Kubota (KUBTY) and The Competition

Kubota (OTCMKTS:KUBTY) is one of 435 publicly-traded companies in the “Machinery” industry, but how does it weigh in compared to its competitors? We will compare Kubota to similar companies based on the strength of its earnings, analyst recommendations, profitability, institutional ownership, valuation, dividends and risk.

Analyst Recommendations

This is a summary of current recommendations for Kubota and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kubota	0	0	0	2	4.00
Kubota Competitors	4069	14453	17862	777	2.41

As a group, “Machinery” companies have a potential upside of 29.81%. Given Kubota’s competitors higher possible upside, analysts clearly believe Kubota has less favorable growth aspects than its competitors.

Insider & Institutional Ownership

0.4% of Kubota shares are owned by institutional investors. Comparatively, 52.2% of shares of all “Machinery” companies are owned by institutional investors. 0.0% of Kubota shares are owned by insiders. Comparatively, 13.9% of shares of all “Machinery” companies are owned 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.

Volatility and Risk

Kubota has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Kubota’s competitors have a beta of 4.52, meaning that their average share price is 352% more volatile than the S&P 500.

Earnings and Valuation

This table compares Kubota and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Kubota	$20.19 billion	$1.25 billion	11.24
Kubota Competitors	$4.56 billion	$347.86 million	-12.91

Kubota has higher revenue and earnings than its competitors. Kubota is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

Kubota pays an annual dividend of $1.21 per share and has a dividend yield of 1.4%. Kubota pays out 15.9% of its earnings in the form of a dividend. As a group, “Machinery” companies pay a dividend yield of 2.4% and pay out 27.3% of their earnings in the form of a dividend.

Profitability

This table compares Kubota and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kubota	8.18%	9.17%	4.26%
Kubota Competitors	-1,947.47%	-19.22%	0.87%

Summary

Kubota beats its competitors on 9 of the 15 factors compared.

Kubota Company Profile

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.