Rockwell Automation (NYSE:ROK) and EnerSys (NYSE:ENS) are both industrial products companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, analyst recommendations, earnings, valuation and profitability.
Insider & Institutional Ownership
76.2% of Rockwell Automation shares are held by institutional investors. Comparatively, 94.8% of EnerSys shares are held by institutional investors. 0.8% of Rockwell Automation shares are held by insiders. Comparatively, 1.7% of EnerSys shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Dividends
Rockwell Automation pays an annual dividend of $4.28 per share and has a dividend yield of 1.8%. EnerSys pays an annual dividend of $0.70 per share and has a dividend yield of 0.8%. Rockwell Automation pays out 55.7% of its earnings in the form of a dividend. EnerSys pays out 15.0% 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. Rockwell Automation has raised its dividend for 11 consecutive years and EnerSys has raised its dividend for 1 consecutive years. Rockwell Automation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Rockwell Automation and EnerSys' gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Rockwell Automation | $6.33 billion | 4.46 | $1.02 billion | $7.68 | 31.68 |
EnerSys | $3.09 billion | 1.25 | $137.12 million | $4.68 | 19.29 |
Rockwell Automation has higher revenue and earnings than EnerSys. EnerSys is trading at a lower price-to-earnings ratio than Rockwell Automation, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Rockwell Automation has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, EnerSys has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Rockwell Automation and EnerSys, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Rockwell Automation | 3 | 9 | 8 | 0 | 2.25 |
EnerSys | 0 | 1 | 2 | 0 | 2.67 |
Rockwell Automation currently has a consensus price target of $234.4667, suggesting a potential downside of 3.62%. EnerSys has a consensus price target of $96.50, suggesting a potential upside of 6.89%. Given EnerSys' stronger consensus rating and higher possible upside, analysts plainly believe EnerSys is more favorable than Rockwell Automation.
Profitability
This table compares Rockwell Automation and EnerSys' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Rockwell Automation | 16.17% | 81.39% | 12.65% |
EnerSys | 3.27% | 12.76% | 5.27% |
Summary
Rockwell Automation beats EnerSys on 10 of the 17 factors compared between the two stocks.