Critical Analysis: HC2 (HCHC) vs. Carlisle Companies (CSL)

Carlisle Companies (NYSE: CSL) and HC2 (NYSE:HCHC) are both multi-sector conglomerates companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Carlisle Companies and HC2, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carlisle Companies 0 2 6 0 2.75
HC2 0 0 1 0 3.00

Carlisle Companies currently has a consensus price target of $122.33, suggesting a potential upside of 5.54%. HC2 has a consensus price target of $11.50, suggesting a potential upside of 111.01%. Given HC2’s stronger consensus rating and higher probable upside, analysts clearly believe HC2 is more favorable than Carlisle Companies.

Dividends

Carlisle Companies pays an annual dividend of $1.48 per share and has a dividend yield of 1.3%. HC2 does not pay a dividend. Carlisle Companies pays out 29.3% of its earnings in the form of a dividend. Carlisle Companies has increased its dividend for 40 consecutive years.

Profitability

This table compares Carlisle Companies and HC2’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carlisle Companies 8.35% 14.11% 8.42%
HC2 -6.13% -67.69% -1.67%

Insider and Institutional Ownership

89.0% of Carlisle Companies shares are held by institutional investors. Comparatively, 59.9% of HC2 shares are held by institutional investors. 2.1% of Carlisle Companies shares are held by insiders. Comparatively, 16.0% of HC2 shares are held 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.

Risk & Volatility

Carlisle Companies has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, HC2 has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Valuation and Earnings

This table compares Carlisle Companies and HC2’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Carlisle Companies $3.68 billion 1.95 $250.10 million $5.05 22.95
HC2 $1.56 billion 0.15 -$94.54 million ($2.57) -2.12

Carlisle Companies has higher revenue and earnings than HC2. HC2 is trading at a lower price-to-earnings ratio than Carlisle Companies, indicating that it is currently the more affordable of the two stocks.

Summary

Carlisle Companies beats HC2 on 12 of the 16 factors compared between the two stocks.

Carlisle Companies Company Profile

Carlisle Companies Incorporated is a manufacturing company. The Company designs, manufactures and markets a range of products that serve a range of markets, including commercial roofing, energy, agriculture, mining, construction, aerospace and defense electronics, medical technology, transportation, general industrial, protective coatings, wood, auto refinishing, foodservice, and healthcare and sanitary maintenance. The Company operates through five segments: Carlisle Construction Materials (Construction Materials); Carlisle Interconnect Technologies (Interconnect Technologies); Carlisle Fluid Technologies (Fluid Technologies); Carlisle Brake & Friction (Brake & Friction), and Carlisle FoodService Products (FoodService Products). The Company markets its products as a component supplier to original equipment manufacturers and distributors, among others.

HC2 Company Profile

HC2 Holdings, Inc. engages in construction, marine services, insurance, telecommunications, energy, life sciences, and other businesses in the United States, the United Kingdom, and internationally. The company fabricates and erects structural steel for commercial and industrial construction projects, such as buildings and office complexes, hotels and casinos, convention centers, sports arenas and stadiums, shopping malls, hospitals, dams, bridges, mines, and power plants. It also fabricates trusses and girders; and fabricates and erects water pipes, water storage tanks, pollution control scrubbers, tunnel liners, pressure vessels, strainers, filters, separators, and various customized products. In addition, the company provides subsea cable installation and maintenance services for the telecommunications sector; installation, maintenance, and repair services for fiber optic communication and power infrastructure to offshore platforms; and installation services for power cables for use in offshore wind farms and in the offshore wind market. Further, it distributes natural gas motor fuels; designs, builds, owns, acquires, operates, and maintains compressed natural gas fueling stations for transportation vehicles; and offers voice communication services for national telecommunications, mobile, prepaid, and voice over Internet protocol service operators, as well as wholesale carriers and Internet service providers. Additionally, the company provides long-term care, life, and annuity insurance products to individuals. Furthermore, it focuses on developing products to treat early osteoarthritis of the knee; develops skin lightening technology; owns licenses to create and distribute NASCAR video games; and offers analytics on broadcast TV, digital, and social media online platforms. The company was formerly known as PTGi Holding Inc. and changed its name to HC2 Holdings, Inc. in April 2014. HC2 Holdings, Inc. was founded in 1994 and is headquartered in New York, New York.

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