Head to Head Survey: Woodward (WWD) and Comfort Systems USA (FIX)

Woodward (NASDAQ: WWD) and Comfort Systems USA (NYSE:FIX) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, risk, valuation, profitability and earnings.

Risk and Volatility

Woodward has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Comfort Systems USA has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.

Dividends

Woodward pays an annual dividend of $0.50 per share and has a dividend yield of 0.7%. Comfort Systems USA pays an annual dividend of $0.30 per share and has a dividend yield of 0.7%. Woodward pays out 18.4% of its earnings in the form of a dividend. Comfort Systems USA pays out 17.4% 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. Comfort Systems USA has raised its dividend for 5 consecutive years. Comfort Systems USA is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Woodward and Comfort Systems USA’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Woodward $2.10 billion 2.09 $200.50 million $2.72 26.33
Comfort Systems USA $1.63 billion 0.92 $64.89 million $1.72 23.60

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

Profitability

This table compares Woodward and Comfort Systems USA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Woodward 8.10% 14.04% 6.95%
Comfort Systems USA 3.76% 16.49% 8.14%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Woodward and Comfort Systems USA, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Woodward 0 5 3 0 2.38
Comfort Systems USA 0 4 0 0 2.00

Woodward presently has a consensus price target of $77.71, suggesting a potential upside of 8.51%. Comfort Systems USA has a consensus price target of $63.00, suggesting a potential upside of 55.17%. Given Comfort Systems USA’s higher possible upside, analysts plainly believe Comfort Systems USA is more favorable than Woodward.

Insider & Institutional Ownership

72.6% of Woodward shares are owned by institutional investors. Comparatively, 92.5% of Comfort Systems USA shares are owned by institutional investors. 6.2% of Woodward shares are owned by company insiders. Comparatively, 3.5% of Comfort Systems USA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Woodward beats Comfort Systems USA on 10 of the 17 factors compared between the two stocks.

About Woodward

Woodward, Inc. is an independent designer, manufacturer and service provider of energy control and optimization solutions. The Company designs, produces and services energy control products for various applications. The Company’s segments include Aerospace and Industrial. The Company’s Aerospace segment designs, manufactures and services systems and products for the management of fuel, air, combustion and motion control. The Company’s Industrial segment designs, produces and services systems and products for the management of fuel, air, fluids, gases, electricity, motion and combustion. The Company has production and assembly facilities in the United States, Europe and Asia and South America, and promotes its products and services throughout the world. The Company offers solutions for the aerospace, industrial and energy markets. The Company focuses primarily on serving original equipment manufacturers (OEMs) and equipment packagers.

About Comfort Systems USA

Comfort Systems USA, Inc. is a provider of mechanical contracting services, which principally includes heating, ventilation and air conditioning (HVAC), plumbing, piping and controls, as well as off-site construction, electrical, monitoring and fire protection. As of December 31, 2016, the Company installed, maintained, repaired and replaced products and systems throughout its 35 operating units in 84 cities and 91 locations throughout the United States. The Company operates primarily in the commercial, industrial and institutional HVAC markets and offers services in the industrial, healthcare, education, office, technology, retail and government facilities. The Company provides a range of construction, renovation, expansion, maintenance, repair and replacement services for mechanical and related systems in commercial, industrial and institutional properties. The Company also provides remote monitoring of temperature, pressure, humidity and air flow for HVAC systems.

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