Regal Beloit (NYSE: RBC) and Hollysys Automation Technologies (NASDAQ:HOLI) are both industrial products companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.
Insider and Institutional Ownership
93.8% of Regal Beloit shares are held by institutional investors. Comparatively, 70.7% of Hollysys Automation Technologies shares are held by institutional investors. 2.2% of Regal Beloit shares are held 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.
Regal Beloit pays an annual dividend of $1.04 per share and has a dividend yield of 1.3%. Hollysys Automation Technologies pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Regal Beloit pays out 22.6% of its earnings in the form of a dividend. Hollysys Automation Technologies pays out 10.5% 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. Hollysys Automation Technologies has increased its dividend for 7 consecutive years.
This table compares Regal Beloit and Hollysys Automation Technologies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hollysys Automation Technologies||15.46%||9.65%||6.59%|
Volatility & Risk
Regal Beloit has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500. Comparatively, Hollysys Automation Technologies has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500.
Earnings & Valuation
This table compares Regal Beloit and Hollysys Automation Technologies’ 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||17.00|
|Hollysys Automation Technologies||$431.94 million||3.25||$68.94 million||$1.14||20.39|
Regal Beloit has higher revenue and earnings than Hollysys Automation Technologies. Regal Beloit is trading at a lower price-to-earnings ratio than Hollysys Automation Technologies, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for Regal Beloit and Hollysys Automation Technologies, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hollysys Automation Technologies||1||1||2||0||2.25|
Regal Beloit currently has a consensus target price of $86.63, suggesting a potential upside of 10.77%. Hollysys Automation Technologies has a consensus target price of $19.65, suggesting a potential downside of 15.47%. Given Regal Beloit’s stronger consensus rating and higher probable upside, research analysts clearly believe Regal Beloit is more favorable than Hollysys Automation Technologies.
Regal Beloit beats Hollysys Automation Technologies on 10 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.
About Hollysys Automation Technologies
Hollysys Automation Technologies Ltd. is a provider of automation and control technologies, and products. The Company’s segments include Industrial Automation (IA), Rail Transportation (rail), Mechanical and Electrical (M&E), and Miscellaneous. Its technologies are applied through its industrial automation solution suite, including the Distributed Control Systems, Programmable Logic Controller, Real-time Management Information System, HolliAS Asset Management System, Operator Training System, Batch Application Package, Advanced Process Control Package (HolliAS APC Suite), Safety Instrumentation System (SIS), railway signaling system of Train Control Center, Automatic Train Protection, Subway Supervisory and Control platform, nuclear power non-safety automation and control system HolliAs-NMS DCS and other products. It serves customers in the industrial, railway, subway, nuclear power, and mechanical and electronic industries in China, Southeast Asia, India, Europe and the Middle East.
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