Regal Beloit (NYSE: RBC) and AZZ (NYSE:AZZ) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.
This is a summary of recent ratings and target prices for Regal Beloit and AZZ, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Institutional & Insider Ownership
93.8% of Regal Beloit shares are owned by institutional investors. Comparatively, 88.0% of AZZ shares are owned by institutional investors. 2.2% of Regal Beloit shares are owned by insiders. Comparatively, 0.0% of AZZ shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Risk and Volatility
Regal Beloit has a beta of 1.48, meaning that its share price is 48% more volatile than the S&P 500. Comparatively, AZZ has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500.
Earnings and Valuation
This table compares Regal Beloit and AZZ’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Regal Beloit||$3.22 billion||1.07||$203.40 million||$4.60||16.86|
|AZZ||$858.93 million||1.55||$60.92 million||$1.97||26.04|
Regal Beloit has higher revenue and earnings than AZZ. Regal Beloit is trading at a lower price-to-earnings ratio than AZZ, indicating that it is currently the more affordable of the two stocks.
Regal Beloit pays an annual dividend of $1.04 per share and has a dividend yield of 1.3%. AZZ pays an annual dividend of $0.68 per share and has a dividend yield of 1.3%. Regal Beloit pays out 22.6% of its earnings in the form of a dividend. AZZ pays out 34.5% 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. Regal Beloit has raised its dividend for 3 consecutive years and AZZ has raised its dividend for 7 consecutive years. Regal Beloit is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Regal Beloit and AZZ’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Regal Beloit beats AZZ on 13 of the 17 factors compared between the two stocks.
About Regal Beloit
Regal Beloit Corporation is a manufacturer of electric motors, electrical motion controls, power generation and power transmission products. The Company operates through three segments: the Commercial and Industrial Systems segment, with its principal line of business in medium and large electric motors, power generation products, high-performance drives and controls and capacitors; the Climate Solutions segment, with its principal line of business in small motors, controls and air moving products, and the Power Transmission Solutions segment, with its principal line of business in power transmission gearing, hydraulic pump drives, open gearing and specialty mechanical products which control motion and torque. It sells its products directly to original equipment manufacturers (OEMs), distributors and end users. It operates distribution facilities in Plainfield, Indiana; McAllen, Texas; LaVergne, Tennessee, and Florence, Kentucky.
AZZ Inc. is a provider of galvanizing services, welding solutions, specialty electrical equipment and engineered services to the power generation, transmission, distribution, refining and industrial markets. The Company operates through two segments: Energy segment and Galvanizing segment. Its Energy segment provides products and services designed to support industrial, nuclear and electrical applications. Its product offerings include custom switchgear, electrical enclosures, medium and high voltage bus ducts, explosion proof and hazardous duty lighting, nuclear safety-related equipment and tubular products. Its Galvanizing segment provides hot dip galvanizing to the steel fabrication industry through facilities located throughout the United States and Canada. It serves fabricators or manufacturers that provide services to the electrical and telecommunications, bridge and highway, petrochemical and general industrial markets and various original equipment manufacturers.
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