Financial Review: Pentair (NYSE:PNR) & Kubota (OTCMKTS:KUBTY)

Pentair (NYSE:PNR) and Kubota (OTCMKTS:KUBTY) are both large-cap industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Earnings & Valuation

This table compares Pentair and Kubota”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pentair	$4.18 billion	2.70	$653.80 million	$3.77	18.70
Kubota	$20.19 billion	0.94	$1.25 billion	$7.59	11.04

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

Institutional & Insider Ownership

92.4% of Pentair shares are owned by institutional investors. Comparatively, 0.4% of Kubota shares are owned by institutional investors. 1.3% of Pentair shares are owned by insiders. Comparatively, 0.0% of Kubota shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Pentair and Kubota’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pentair	15.44%	20.10%	11.25%
Kubota	8.18%	9.12%	4.27%

Risk & Volatility

Pentair has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Kubota has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Pentair and Kubota, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pentair	2	7	7	1	2.41
Kubota	2	1	0	1	2.00

Pentair presently has a consensus price target of $76.59, suggesting a potential upside of 8.63%. Given Pentair’s stronger consensus rating and higher possible upside, analysts clearly believe Pentair is more favorable than Kubota.

Dividends

Pentair pays an annual dividend of $1.08 per share and has a dividend yield of 1.5%. Kubota pays an annual dividend of $1.19 per share and has a dividend yield of 1.4%. Pentair pays out 28.6% of its earnings in the form of a dividend. Kubota pays out 15.7% 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. Pentair has increased its dividend for 7 consecutive years. Pentair is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Pentair beats Kubota on 13 of the 17 factors compared between the two stocks.

About Pentair

Pentair plc provides various water solutions in the United States, Western Europe, China, Eastern Europe, Latin America, the Middle East, Southeast Asia, Australia, Canada, and Japan. The company operates through three segments: Flow, Water Solutions, and Pool. The Flow segment designs, manufactures, and sells fluid treatment and pump products and systems, including pressure vessels, gas recovery solutions, membrane bioreactors, wastewater reuse systems and advanced membrane filtration, separation systems, water disposal pumps, water supply pumps, fluid transfer pumps, turbine pumps, solid handling pumps, and agricultural spray nozzles for fluid delivery, ion exchange, desalination, food and beverage, separation technologies in the oil and gas industry, residential and municipal wells, water treatment, wastewater solids handling, pressure boosting, circulation and transfer, fire suppression, flood control, agricultural irrigation, and crop spray in residential, commercial, and industrial markets. The Water Solutions segment provides commercial and residential water treatment products and systems, including pressure tanks, control valves, activated carbon products, commercial ice machines, conventional filtration products, and point-of-entry and point-of-use water treatment systems, as well as installation and preventative services for use in residential whole home water filtration, drinking water filtration, and water softening solutions, as well as commercial total water management and filtration in foodservice operations. The Pool segment provides residential and commercial pool equipment and accessories comprising pumps, filters, heaters, lights, automatic controls, automatic cleaners, maintenance equipment, and pool accessories for applications in residential and commercial pool maintenance, pool repair, renovation, service, and construction and aquaculture solutions. Pentair plc was founded in 1966 and is headquartered in London, the United Kingdom.

About Kubota

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.