Illinois Tool Works (NYSE:ITW) and Crane (NYSE:CR) are both industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitability, analyst recommendations and earnings.
Earnings & Valuation
This table compares Illinois Tool Works and Crane's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Illinois Tool Works | $14.11 billion | 4.97 | $2.52 billion | $7.75 | 28.60 |
Crane | $3.28 billion | 1.68 | $133.30 million | $6.02 | 15.71 |
Illinois Tool Works has higher revenue and earnings than Crane. Crane is trading at a lower price-to-earnings ratio than Illinois Tool Works, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
77.4% of Illinois Tool Works shares are held by institutional investors. Comparatively, 65.9% of Crane shares are held by institutional investors. 0.8% of Illinois Tool Works shares are held by company insiders. Comparatively, 3.6% of Crane shares are held by company 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.
Dividends
Illinois Tool Works pays an annual dividend of $4.56 per share and has a dividend yield of 2.1%. Crane pays an annual dividend of $1.72 per share and has a dividend yield of 1.8%. Illinois Tool Works pays out 58.8% of its earnings in the form of a dividend. Crane pays out 28.6% 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. Illinois Tool Works has raised its dividend for 50 consecutive years and Crane has raised its dividend for 1 consecutive years. Illinois Tool Works is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
This is a summary of recent ratings and target prices for Illinois Tool Works and Crane, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Illinois Tool Works | 1 | 11 | 4 | 0 | 2.19 |
Crane | 0 | 2 | 3 | 0 | 2.60 |
Illinois Tool Works presently has a consensus price target of $210.1250, suggesting a potential downside of 5.19%. Crane has a consensus price target of $77.75, suggesting a potential downside of 17.79%. Given Illinois Tool Works' higher possible upside, research analysts plainly believe Illinois Tool Works is more favorable than Crane.
Profitability
This table compares Illinois Tool Works and Crane's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Illinois Tool Works | 16.77% | 80.95% | 14.37% |
Crane | 0.71% | 18.09% | 5.80% |
Volatility and Risk
Illinois Tool Works has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Crane has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500.
Summary
Illinois Tool Works beats Crane on 12 of the 17 factors compared between the two stocks.