CNH Global (CNH) versus Toro (TTC) Critical Review

CNH Global (NYSE: CNH) and Toro (NYSE:TTC) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Dividends

Toro pays an annual dividend of $0.70 per share and has a dividend yield of 1.1%. CNH Global does not pay a dividend. Toro pays out 29.4% of its earnings in the form of a dividend. CNH Global has increased its dividend for 7 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for CNH Global and Toro, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CNH Global 0 0 0 0 N/A
Toro 0 3 1 0 2.25

Toro has a consensus price target of $58.67, suggesting a potential downside of 10.30%.

Profitability

This table compares CNH Global and Toro’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CNH Global N/A N/A N/A
Toro 10.63% 45.32% 17.73%

Insider and Institutional Ownership

75.2% of Toro shares are owned by institutional investors. 5.7% of Toro shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares CNH Global and Toro’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CNH Global N/A N/A N/A $5.40 N/A
Toro $2.39 billion 2.95 $230.99 million $2.38 27.48

Toro has higher revenue and earnings than CNH Global. CNH Global is trading at a lower price-to-earnings ratio than Toro, indicating that it is currently the more affordable of the two stocks.

Summary

Toro beats CNH Global on 8 of the 11 factors compared between the two stocks.

CNH Global Company Profile

CNH Global N.V. (CNH) is a global, full-line company in both the agricultural and construction equipment industries. The Company organizes its operations into three business segments: agricultural equipment, construction equipment and financial services. The Company markets its products globally through its two brand families, Case and New Holland. Case IH (along with Steyr in Europe) and New Holland make up its agricultural brand family. Case and New Holland Construction (along with Kobelco in North America) make up its construction equipment brand family. During the year ended December 31, 2012, the Company was manufacturing its products in 37 facilities globally and distributing its products in approximately 170 countries through a network of approximately 11,500 dealers and distributors.

Toro Company Profile

The Toro Company (Toro) is engaged in the designing, manufacturing, and marketing of professional turf maintenance equipment and services, turf irrigation systems, landscaping equipment and lighting products, snow and ice management products, agricultural micro-irrigation systems, rental and specialty construction equipment, and residential yard and snow thrower products. The Company operates through three segments: Professional, Residential and Distribution. Under the Professional segment, Toro designs professional turf, landscape and lighting, rental and specialty construction, snow and ice management, and agricultural products. The Residential segment provides products, such as riding products, home solutions products and snow thrower products. It manufactures and markets various walk power mower models. The Distribution segment consists of Company-owned domestic distributorship. Its brands include Toro, Exmark, BOSS, Irritrol, Hayter, Pope, Unique Lighting Systems and Lawn-Boy.

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