Head-To-Head Contrast: Atlas Copco (OTCMKTS:ATLKY) versus PACCAR (NASDAQ:PCAR)

Atlas Copco (OTCMKTS:ATLKY) and PACCAR (NASDAQ:PCAR) are both large-cap industrials companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Valuation & Earnings

This table compares Atlas Copco and PACCAR”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atlas Copco	$17.21 billion	5.98	$2.70 billion	$0.57	37.05
PACCAR	$28.44 billion	2.03	$2.38 billion	$4.76	23.04

Atlas Copco has higher earnings, but lower revenue than PACCAR. PACCAR is trading at a lower price-to-earnings ratio than Atlas Copco, indicating that it is currently the more affordable of the two stocks.

Dividends

Atlas Copco pays an annual dividend of $0.35 per share and has a dividend yield of 1.7%. PACCAR pays an annual dividend of $1.40 per share and has a dividend yield of 1.3%. Atlas Copco pays out 61.4% of its earnings in the form of a dividend. PACCAR pays out 29.4% 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. PACCAR has increased its dividend for 5 consecutive years.

Risk and Volatility

Atlas Copco has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500. Comparatively, PACCAR has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Institutional & Insider Ownership

0.0% of Atlas Copco shares are held by institutional investors. Comparatively, 64.9% of PACCAR shares are held by institutional investors. 2.0% of PACCAR shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Atlas Copco and PACCAR’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Atlas Copco	15.66%	24.10%	12.77%
PACCAR	9.00%	12.73%	5.69%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Atlas Copco and PACCAR, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atlas Copco	2	2	5	1	2.50
PACCAR	0	11	3	0	2.21

PACCAR has a consensus price target of $133.91, suggesting a potential upside of 22.09%. Given PACCAR’s higher possible upside, analysts plainly believe PACCAR is more favorable than Atlas Copco.

Summary

Atlas Copco beats PACCAR on 11 of the 18 factors compared between the two stocks.

About Atlas Copco

Atlas Copco AB provides compressed air and gas, vacuum, energy, dewatering and industrial pump, industrial power tool, and assembly and machine vision solutions in North America, South America, Europe, Africa, the Middle East, Asia, and Oceania. It operates through Compressor Technique, Vacuum Technique, Industrial Technique, and Power Technique segments. The company offers piston compressors, oil-free tooth and scroll compressors, rotary screw compressors, oil-free blowers, oil-free centrifugal compressors, gas and process compressors, air and gas treatment equipment, expanders and pumps, and medical air solutions. It also provides oil-sealed rotary vane, dry, and liquid ring vacuum pumps; turbomolecular and cryogenic pumps; abatement and integrated systems; industrial assembly tools and solutions; self-pierce riveting solutions; adhesive dispensing and flow drill fastening equipment; material removal tools, and drills and other pneumatic products; machine vision solutions; construction and demolition tools; mobile compressors, generators, and energy storage systems; and industrial flow, portable power, portable flow, and portable air products, as well as specialty rental services. The company serves the semiconductor and flat panel, industrial manufacturing, civil engineering, demolition, exploration drilling, automotive, off-highway vehicles, electronics, aerospace, energy, food, pharmaceutical, textile, and other industries. Atlas Copco AB was founded in 1873 and is headquartered in Nacka, Sweden.

About PACCAR

PACCAR Inc designs, manufactures, and distributes light, medium, and heavy-duty commercial trucks in the United States, Canada, Europe, Mexico, South America, Australia, and internationally. It operates through three segments: Truck, Parts, and Financial Services. The Truck segment designs, manufactures, and distributes trucks for the over-the-road and off-highway hauling of commercial and consumer goods. It sells its trucks through a network of independent dealers under the Kenworth, Peterbilt, and DAF nameplates. The Parts segment distributes aftermarket parts for trucks and related commercial vehicles. The Financial Services segment conducts full-service leasing operations under the PacLease trade name, as well as provides finance and leasing products and services to customers and dealers. This segment also offers equipment financing and administrative support services for its franchisees; retail loan and leasing services for small, medium, and large commercial trucking companies, as well as independent owners/operators and other businesses; and truck inventory financing services to independent dealers. In addition, this segment offers loans and leases directly to customers for the acquisition of trucks and related equipment. The company also manufactures and markets industrial winches under the Braden, Carco, and Gearmatic nameplates. PACCAR Inc was founded in 1905 and is headquartered in Bellevue, Washington.