Contrasting Rexnord (RXN) and Park-Ohio (PKOH)

Park-Ohio (NASDAQ: PKOH) and Rexnord (NYSE:RXN) are both industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Dividends

Park-Ohio pays an annual dividend of $0.50 per share and has a dividend yield of 1.1%. Rexnord does not pay a dividend. Park-Ohio pays out 21.2% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations for Park-Ohio and Rexnord, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Park-Ohio 0 2 0 0 2.00
Rexnord 0 1 2 0 2.67

Park-Ohio currently has a consensus target price of $37.00, indicating a potential downside of 17.69%. Rexnord has a consensus target price of $27.00, indicating a potential upside of 3.45%. Given Rexnord’s stronger consensus rating and higher possible upside, analysts plainly believe Rexnord is more favorable than Park-Ohio.

Profitability

This table compares Park-Ohio and Rexnord’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Park-Ohio 2.16% 14.79% 3.63%
Rexnord 5.83% 8.44% 3.32%

Risk & Volatility

Park-Ohio has a beta of 3.47, meaning that its share price is 247% more volatile than the S&P 500. Comparatively, Rexnord has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500.

Valuation & Earnings

This table compares Park-Ohio and Rexnord’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Park-Ohio $1.28 billion 0.44 $31.70 million $2.36 19.05
Rexnord $1.92 billion 1.41 $74.10 million $0.66 39.55

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

Institutional & Insider Ownership

55.9% of Park-Ohio shares are held by institutional investors. 31.0% of Park-Ohio shares are held by insiders. Comparatively, 3.5% of Rexnord shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Rexnord beats Park-Ohio on 9 of the 16 factors compared between the two stocks.

Park-Ohio Company Profile

Park-Ohio Holdings Corp. is a diversified international company providing supply chain management outsourcing services, capital equipment used on their production lines and manufactured components used to assemble its products. The Company operates in three segments: Supply Technologies, Assembly Components and Engineered Products. Supply Technologies provides its customers with Total Supply Management, which manages every aspect of supplying production parts and materials to its customers’ manufacturing floor, from strategic planning to program implementation. Assembly Components manufactures products oriented towards fuel efficiency and reduced emission standards. Engineered Products segment operates a group of manufacturing businesses that design and manufacture a range of products, including induction heating and melting systems, pipe threading systems, and forged and machined products. It operates through the subsidiaries of its direct subsidiary, Park-Ohio Industries, Inc.

Rexnord Company Profile

Rexnord Corporation is a multi-platform industrial company. The Company operates through two segments: Process & Motion Control platform, and Water Management platform. The Process & Motion Control platform designs, manufactures, markets and services a range of engineered mechanical components used within systems. The Process & Motion Control portfolio includes motion control products, shaft management products, aerospace components and related value-added services. Its Process & Motion Control brands include Rexnord, Rex, Euroflex, Falk, FlatTop, Link-Belt, Thomas and Tollok. The Water Management platform designs, procures and markets products that provide and enhance water quality, safety, flow control and conservation. The Water Management product portfolio includes professional grade water control and safety, water distribution and drainage, finish plumbing and site works products. Its products are marketed and sold under various brand names, including Zurn, Wilkins and VAG.

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