Image source: Joy Global.

Both Joy Global (NYSE:JOY) and Caterpillar (NYSE:CAT) have had to deal with big losses recently in the aftermath of plunging prices for precious and base industrial metals. Joy Global has a strong concentration in the mining equipment niche, but Caterpillar is more diversified and has a broader reach in serving customers in the energy, construction, and agricultural industries. For those hoping to see a commodities turnaround, the question is which of these two stocks could produce better long-term returns. Let's compare Joy Global and Caterpillar on several key metrics to see which looks more attractive currently.

Both Joy Global and Caterpillar have seen considerable declines, but Joy Global's has been much more severe. Joy Global stock has fallen by nearly 80% over the past year, compared to just 30% for Caterpillar.

Unfortunately, it's difficult to compare valuations based on typical measures because Joy Global has posted massive losses recently. In its most recent quarter, Joy Global took an impairment charge of about $1.34 billion to reflect lower values of goodwill and other assets. If you use adjusted earnings per share, though, Joy Global's $1.95 per share for the full year equates to an earnings multiple of about 4.5 at current levels. Caterpillar looks expensive by that measure with a P/E of 12, but it has continued to make a profit even under GAAP rules.

Looking at forward earnings, the differences nearly go away. Joy Global weighs in with an 18 forward earnings multiple, while Caterpillar trades at about 17 times forward earnings. That leaves the two stocks with arguably comparable valuations, with arguably greater risk and reward potential for Joy Global due to its smaller size and greater volatility.

For dividend investors, the choice is much simpler. Joy Global made a decision to slash its dividend, and it now pays just $0.01 per share on a quarterly basis. That works out to a yield of just 0.4%. By contrast, Caterpillar has not only sustained its dividend but raised it recently, paying a yield of almost 5%.

Joy Global's decision to cut its dividend was prompted by a desire to reduce the amount of cash the company has had to spend. Despite efforts to cut costs that were more successful than initially anticipated, Joy Global's didn't go as far as it wanted, and it now expects to save about $75 million by having cut its dividend by 95%. By contrast, Caterpillar has remained committed to its dividend, and its cash situation is much healthier. Moreover, greater access to capital markets gives Caterpillar alternatives that Joy Global doesn't have. Caterpillar is the clear choice for dividend investors.

Both Joy Global and Caterpillar are going through tough times, and the pain that each have felt are roughly comparable. Joy Global's year-over-year quarterly results included a 24% drop in revenue, compared to a 19% decline for Caterpillar. Joy Global's operating losses were striking, but they largely reflected the impairment charges. Still, on an adjusted basis, Joy Global's operating profit was down more than 60% from year-ago levels, compared to a 44% fall for Caterpillar.

Both companies have taken a defensive posture, but Caterpillar hasn't had to take as extreme action as Joy Global has. Joy Global sees 2016 as being extremely challenging, with adjusted earnings falling to just $0.10 to $0.50 per share. Meanwhile, Caterpillar has made smart cost-containment moves, but it remains in a position to capture commanding market share once the downturn ends. All told, Caterpillar looks better poised to survive the tough period.

Both Joy Global and Caterpillar are struggling right now, and Joy Global's bigger share-price decline might make it look like more of a value to some investors. Yet Caterpillar is better positioned defensively to last through a down cycle in the industry, and so for all but the most speculative of investors, Caterpillar is the better buy currently.