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

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

Analyst Recommendations

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

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

L.B. Foster currently has a consensus price target of $32.00, indicating a potential downside of 11.99%. Caterpillar has a consensus price target of $994.38, indicating a potential upside of 20.29%. Given Caterpillar’s stronger consensus rating and higher possible upside, analysts plainly believe Caterpillar is more favorable than L.B. Foster.

Profitability

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

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
L.B. Foster	$540.01 million	0.71	$7.55 million	$1.05	34.63
Caterpillar	$67.59 billion	5.62	$8.88 billion	$23.24	35.57

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.

Insider and Institutional Ownership

80.6% of L.B. Foster shares are held by institutional investors. Comparatively, 71.0% of Caterpillar shares are held by institutional investors. 7.6% of L.B. Foster shares are held by insiders. Comparatively, 0.3% of Caterpillar shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

L.B. Foster has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, Caterpillar has a beta of 1.58, meaning that its stock price is 58% more volatile than the S&P 500.

Summary

Caterpillar beats L.B. Foster on 13 of the 15 factors compared between the two stocks.

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.

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.