Head-To-Head Comparison: L.B. Foster (NASDAQ:FSTR) & Caterpillar (NYSE:CAT)

Caterpillar (NYSE:CAT) and L.B. Foster (NASDAQ:FSTR) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, risk, analyst recommendations, earnings and dividends.

Profitability

This table compares Caterpillar and L.B. Foster’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Caterpillar	14.51%	55.53%	11.38%
L.B. Foster	2.04%	7.61%	4.03%

Volatility & Risk

Caterpillar has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500. Comparatively, L.B. Foster has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500.

Insider & Institutional Ownership

71.0% of Caterpillar shares are owned by institutional investors. Comparatively, 80.6% of L.B. Foster shares are owned by institutional investors. 0.3% of Caterpillar shares are owned by insiders. Comparatively, 7.6% of L.B. Foster shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Caterpillar pays an annual dividend of $6.52 per share and has a dividend yield of 0.8%. L.B. Foster pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. Caterpillar pays out 28.1% of its earnings in the form of a dividend. L.B. Foster pays out 15.2% 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. Caterpillar has raised its dividend for 30 consecutive years. Caterpillar is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Caterpillar and L.B. Foster, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Caterpillar	0	11	15	1	2.63
L.B. Foster	0	3	1	0	2.25

Caterpillar presently has a consensus target price of $994.38, suggesting a potential upside of 20.24%. L.B. Foster has a consensus target price of $32.00, suggesting a potential downside of 14.35%. Given Caterpillar’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Caterpillar is more favorable than L.B. Foster.

Earnings & Valuation

This table compares Caterpillar and L.B. Foster”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Caterpillar	$67.59 billion	5.62	$8.88 billion	$23.24	35.58
L.B. Foster	$558.35 million	0.70	$7.55 million	$1.05	35.58

Caterpillar has higher revenue and earnings than L.B. Foster. L.B. Foster is trading at a lower price-to-earnings ratio than Caterpillar, indicating that it is currently the more affordable of the two stocks.

Summary

Caterpillar beats L.B. Foster on 15 of the 18 factors compared between the two stocks.

About Caterpillar

Caterpillar Inc. manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in worldwide. Its Construction Industries segment offers asphalt pavers, compactors, road reclaimers, forestry machines, cold planers, material handlers, track-type tractors, excavators, telehandlers, motor graders, and pipelayers; compact track, wheel, track-type, backhoe, and skid steer loaders; and related parts and tools. The company's Resource Industries segment provides electric rope and hydraulic shovels, draglines, rotary drills, hard rock vehicles, tractors, mining trucks, wheel loaders, off-highway and articulated trucks, wheel tractor scrapers and dozers, fleet management products, landfill and soil compactors, machinery components, autonomous ready vehicles and solutions, work tools, and safety services and mining performance solutions, as well as related parts and services. Its Energy & Transportation segment offers reciprocating engine powered generator sets; reciprocating engines, drivetrain, and integrated systems and solutions; turbines, centrifugal gas compressors, and related services; and diesel-electric locomotives and components, and other rail-related products. The company's Financial Products segment provides operating and finance leases, installment sale contracts, revolving charge accounts, repair/rebuild financing services, working capital loans, and wholesale financing; and insurance and risk management products and services. Its All Other Operating segment offers filters and fluids, undercarriage, ground engaging tools, fluid transfer products, precision seals, and rubber sealing and connecting components; parts distribution; logistics solutions and distribution services; brand management and marketing strategy services; and digital investments services. Caterpillar Inc. was founded in 1925 and is headquartered in Irving, Texas.

About L.B. Foster

L.B. Foster Company provides engineered and manufactured products and services for the building and infrastructure projects in the United States, Canada, the United Kingdom, and internationally. It operates through two segments: Rail, Technologies, and Services; and Infrastructure Solutions. The Rail, Technologies, and Services segment offers new rail to passenger and short line freight railroads, industrial companies, and rail contractors, as well as used rails; rail accessories, such as rack spikes, bolts, angle bars, tie plates, and other products; insulated rail joints and related accessories; fixation fasteners, coverboards, and special accessories; and trackwork products. This segment also provides engineered concrete railroad ties, friction management products and application systems, railroad condition monitoring systems and equipment including wheel impact load detection systems, wayside data collection and management systems, and rockfall, flood, earthworks, and bridge strike monitoring; and aftermarket services. The Infrastructure Solutions segment manufactures precast concrete products for use as restrooms, concession stands, and protective storage buildings under the CXT brand for national, state, and municipal parks; and manufactures sounds walls, bridge beams, box culverts, septic tanks, and other custom pre-stressed and precast concrete products. This segment also provides steel bridge products; corrosion protection solutions; concrete-reinforced steel grid decking, open steel grid deck, aluminum bridge railing, and stay-in-place steel bridge forms; cuts, threads, and paints pipe; threading services for water well applications; protective pipeline coating services; and turnkey solutions for metering and injection systems for oil and gas markets. L.B. Foster Company was founded in 1902 and is headquartered in Pittsburgh, Pennsylvania.