Analyzing Toro (NYSE:TTC) and Husqvarna AB (publ) (OTCMKTS:HUSQF)

Toro (NYSE:TTC) and Husqvarna AB (publ) (OTCMKTS:HUSQF) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, profitability, risk, institutional ownership and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for Toro and Husqvarna AB (publ), as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toro	0	3	0	0	2.00
Husqvarna AB (publ)	0	0	0	0	N/A

Toro currently has a consensus target price of $93.33, suggesting a potential upside of 14.35%. Given Toro’s higher probable upside, equities research analysts plainly believe Toro is more favorable than Husqvarna AB (publ).

Profitability

This table compares Toro and Husqvarna AB (publ)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toro	8.89%	25.94%	10.95%
Husqvarna AB (publ)	N/A	N/A	N/A

Insider & Institutional Ownership

88.0% of Toro shares are owned by institutional investors. Comparatively, 31.8% of Husqvarna AB (publ) shares are owned by institutional investors. 1.6% of Toro shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Toro and Husqvarna AB (publ)”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toro	$4.55 billion	1.84	$329.70 million	$3.81	21.42
Husqvarna AB (publ)	N/A	N/A	N/A	$2.55	2.59

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

Dividends

Toro pays an annual dividend of $1.44 per share and has a dividend yield of 1.8%. Husqvarna AB (publ) pays an annual dividend of $1.50 per share and has a dividend yield of 22.7%. Toro pays out 37.8% of its earnings in the form of a dividend. Husqvarna AB (publ) pays out 58.9% 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. Toro has raised its dividend for 20 consecutive years.

Summary

Toro beats Husqvarna AB (publ) on 11 of the 12 factors compared between the two stocks.

About Toro

The Toro Company designs, manufactures, markets, and sells professional turf maintenance equipment and services. It operates through two segments: Professional and Residential. The Professional segment offers turf and landscape equipment products, including sports fields and grounds mowing and maintenance equipment, golf course mowing and maintenance equipment, landscape contractor mowing equipment, landscape creation and renovation equipment, and other maintenance equipment; rental, specialty, and underground construction equipment, such as horizontal directional drills, walk and ride trenchers, stand-on skid steers, vacuum excavators, stump grinders, turf renovation products, asset locators, pipe rehabilitation solutions, materials handling equipment, and other after-market tools; and snow and ice management equipment, such as snowplows, as well as stand-on snow and ice removal equipment, such as snowplow, snow brush, and snow thrower attachments, salt and sand spreaders, and related parts and accessories for light and medium duty trucks, utility task vehicles, skid steers, and front-end loaders. This segment also provides irrigation and lighting products that consist of sprinkler heads, electric and hydraulic valves, controllers, computer irrigation central control systems, coupling systems, and ag-irrigation drip tape and hose products, as well as professionally installed landscape lighting products offered through distributors and landscape contractors. The Residential segment provides walk power mowers, zero-turn riding mowers, snow throwers, replacement parts, and home solution products that include grass and hedge trimmers, leaf blowers, blower-vacuums, chainsaws, string trimmers, hoses, and hose-end retail irrigation products. It sells its products through a network of distributors, dealers, mass retailers, hardware retailers, equipment rental centers, home centers, and online. The company was founded in 1914 and is headquartered in Bloomington, Minnesota.

About Husqvarna AB (publ)

Husqvarna AB (publ) produces and sells outdoor power products, watering products, and lawn care power equipment. It operates through three divisions: Husqvarna Forest & Garden; Gardena; and Husqvarna Construction. The Husqvarna Forest & Garden division offers handheld products, such as chainsaws, brush cutters, trimmers, and leaf blowers; wheeled products, such as front riders and zero-turn mowers; robotic lawn mowers; and accessories and spare parts. The Gardena division provides residential and smart watering; robotic mowers; garden hand tools; electric powered gardening tools; and smart garden systems. The Husqvarna Construction division offers power cutters, light compaction and concrete placement equipment, dust and slurry solutions, diamond tools for construction and stone industries, surface preparation equipment, floor saws, and demolition robots. The company sells its products and solutions to forestry, tree care, landscaping, commercial lawn, and garden services sectors, as well as home and garden owners, and light construction and stone industries primarily under the Husqvarna, Gardena, Orbit, Flymo, RedMax, Zenoah, and McCulloch brands through dealers and retailers. It operates in Germany, France, Sweden, Austria, rest of Europe, the Asia/Pacific, Canada, the United States, Latin America, and internationally. Husqvarna AB (publ) was founded in 1689 and is headquartered in Stockholm, Sweden.