Franklin Electric Co. (NASDAQ: FELE) and Colfax Corp (NYSE:CFX) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitabiliy, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.
Volatility and Risk
Franklin Electric Co. has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500. Comparatively, Colfax Corp has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500.
Franklin Electric Co. pays an annual dividend of $0.43 per share and has a dividend yield of 1.1%. Colfax Corp does not pay a dividend. Franklin Electric Co. pays out 23.4% of its earnings in the form of a dividend. Franklin Electric Co. has raised its dividend for 7 consecutive years.
This table compares Franklin Electric Co. and Colfax Corp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Franklin Electric Co.||8.62%||13.10%||7.72%|
Earnings and Valuation
This table compares Franklin Electric Co. and Colfax Corp’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Franklin Electric Co.||$1.00 billion||1.82||$146.27 million||$1.84||21.22|
|Colfax Corp||$3.62 billion||1.35||$446.48 million||$1.28||31.13|
Colfax Corp has higher revenue and earnings than Franklin Electric Co.. Franklin Electric Co. is trading at a lower price-to-earnings ratio than Colfax Corp, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
76.9% of Franklin Electric Co. shares are owned by institutional investors. Comparatively, 77.3% of Colfax Corp shares are owned by institutional investors. 2.5% of Franklin Electric Co. shares are owned by company insiders. Comparatively, 10.6% of Colfax Corp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a breakdown of current ratings and target prices for Franklin Electric Co. and Colfax Corp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Franklin Electric Co.||0||0||1||0||3.00|
Franklin Electric Co. presently has a consensus target price of $52.00, suggesting a potential upside of 33.16%. Colfax Corp has a consensus target price of $46.00, suggesting a potential upside of 15.43%. Given Franklin Electric Co.’s stronger consensus rating and higher probable upside, equities analysts plainly believe Franklin Electric Co. is more favorable than Colfax Corp.
Franklin Electric Co. beats Colfax Corp on 10 of the 17 factors compared between the two stocks.
About Franklin Electric Co.
Franklin Electric Co., Inc. designs, manufactures and distributes water and fuel pumping systems, consisting of submersible motors, pumps, electronic controls and related parts and equipment. Its segments include Water Systems segment, the Fueling Systems segment and Other. Its Water Systems segment is engaged in the production and marketing of water pumping systems and offers motors, pumps, drives, electronic controls and monitoring devices. It also designs, manufactures and sells motors, pumps, electronic controls and related parts and equipment for use in groundwater, wastewater and fuel transfer applications. Its Fueling Systems is engaged in the production and marketing of fuel pumping systems, fuel containment systems, and monitoring and control systems. It also designs, manufactures and sells pumps, pipe, sumps, fittings, vapor recovery components, electronic controls, monitoring devices and related parts and equipment for use in submersible fueling system applications.
About Colfax Corp
Colfax Corporation is an industrial manufacturing and engineering company. The Company provides gas and fluid handling and fabrication technology products and services to customers around the world. The Company’s segments include Gas and Fluid Handling, and Fabrication Technology. The Gas and Fluid Handling segment supplies a range of gas and fluid handling products, including heavy-duty centrifugal and axial fans, rotary heat exchangers, gas compressors, pumps and certain related products, as well as aftermarket and lubrication-related services, which serves customers in the power generation, oil, gas and petrochemical, mining, marine (including defense) and general industrial and other end markets. The Fabrication Technology segment supplies welding equipment and consumables, cutting equipment and consumables, and automated welding and cutting systems. It formulates, develops, manufactures and supplies consumable products and equipment.
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