Critical Comparison: Dover (DOV) and SPX (SPXC)

Dover (NYSE: DOV) and SPX (NYSE:SPXC) are both industrial products companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Profitability

This table compares Dover and SPX’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dover 8.91% 14.10% 5.52%
SPX -3.86% 37.49% 4.23%

Risk & Volatility

Dover has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, SPX has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500.

Dividends

Dover pays an annual dividend of $1.88 per share and has a dividend yield of 1.9%. SPX does not pay a dividend. Dover pays out 43.7% of its earnings in the form of a dividend. SPX has increased its dividend for 61 consecutive years.

Analyst Recommendations

This is a summary of current ratings and price targets for Dover and SPX, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dover 0 10 6 0 2.38
SPX 0 0 0 0 N/A

Dover currently has a consensus price target of $94.82, indicating a potential downside of 5.99%. Given Dover’s higher probable upside, research analysts plainly believe Dover is more favorable than SPX.

Institutional & Insider Ownership

84.4% of Dover shares are held by institutional investors. Comparatively, 86.9% of SPX shares are held by institutional investors. 2.5% of Dover shares are held by company insiders. Comparatively, 0.6% of SPX shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Dover and SPX’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dover $6.79 billion 2.31 $508.89 million $4.30 23.46
SPX $1.47 billion 0.91 -$67.20 million ($1.36) -23.11

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

Summary

Dover beats SPX on 11 of the 16 factors compared between the two stocks.

Dover Company Profile

Dover Corporation is a diversified global manufacturer delivering equipment and components, specialty systems, consumable supplies, software and digital solutions and support services. The Company’s segments include Energy, Engineered Systems, Fluids and Refrigeration & Food Equipment. The Company’s Energy segment is a provider of solutions and services for production and processing of fuels around the world. Its Engineered Systems segment includes two platforms: Printing & Identification, and Industrials and is focused on the design, manufacture and service of critical equipment and components serving the fast-moving consumer goods, digital textile printing and industrial end markets. Its Fluids segment is focused on the safe handling of critical fluids across the retail fueling, chemical, and industrial end markets. The Refrigeration & Food Equipment segment is a provider of energy efficient equipment and systems serving the commercial refrigeration and food equipment end markets.

SPX Company Profile

SPX Corporation is a global supplier of infrastructure equipment. The Company operates through three segments: HVAC; Detection and Measurement, and Engineered Solutions. The HVAC solutions offered by its businesses include package cooling towers, residential and commercial boilers, heating and ventilation products. Its detection and measurement product lines encompass underground pipe and cable locators, and inspection equipment. Within its power platform, it is a manufacturer of medium and large power transformers, as well as equipment for various types of power plant, including cooling equipment, heat exchangers and pollution control systems. As of December 31, 2016, the Company had operations in approximately 15 countries.

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