RBC Bearings (ROLL) & NN (NNBR) Critical Analysis
RBC Bearings (NASDAQ: ROLL) and NN (NASDAQ:NNBR) are both industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitabiliy, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.
This table compares RBC Bearings and NN’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
RBC Bearings has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, NN has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500.
Earnings and Valuation
This table compares RBC Bearings and NN’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|RBC Bearings||$615.39 million||3.97||$148.92 million||$2.97||34.61|
|NN||$847.58 million||0.85||$138.31 million||$0.61||43.03|
RBC Bearings has higher revenue, but lower earnings than NN. RBC Bearings is trading at a lower price-to-earnings ratio than NN, indicating that it is currently the more affordable of the two stocks.
NN pays an annual dividend of $0.28 per share and has a dividend yield of 1.1%. RBC Bearings does not pay a dividend. NN pays out 45.9% of its earnings in the form of a dividend.
This is a summary of current recommendations and price targets for RBC Bearings and NN, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
RBC Bearings presently has a consensus target price of $73.00, suggesting a potential downside of 28.99%. NN has a consensus target price of $33.50, suggesting a potential upside of 27.62%. Given NN’s stronger consensus rating and higher probable upside, analysts clearly believe NN is more favorable than RBC Bearings.
Insider & Institutional Ownership
99.9% of RBC Bearings shares are held by institutional investors. Comparatively, 96.3% of NN shares are held by institutional investors. 4.4% of RBC Bearings shares are held by insiders. Comparatively, 2.8% of NN shares are held 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.
RBC Bearings beats NN on 9 of the 16 factors compared between the two stocks.
About RBC Bearings
RBC Bearings Incorporated is an international manufacturer and marketer of engineered precision bearings and products, which are integral to the manufacture and operation of machines, aircraft and mechanical systems. The Company operates through four segments: Plain Bearings; Roller Bearings; Ball Bearings, and Engineered Products. The Company has over 40 facilities of which over 30 are manufacturing facilities in approximately five countries. The Company classifies its customers into two categories: industrial and aerospace. The Company manufactures bearings and engineered products for a range of diversified industrial markets, including construction and mining, oil and natural resource extraction, heavy truck, marine, rail and train, packaging, semiconductor machinery and the general industrial markets. The Company supplies bearings and engineered products for use in commercial, private and military aircraft and aircraft engines, guided weaponry, and vision and optical systems.
NN, Inc. is a diversified industrial company and a manufacturer of high precision bearing components, industrial plastic products and precision metal components to a range of markets on a global basis. The Company operates through three segments: the Precision Bearing Components Group, the Precision Engineered Products Group and the Autocam Precision Components Group. Within its Precision Bearing Components Group, it manufactures and supplies high precision bearing components, consisting of balls, cylindrical rollers, tapered rollers, spherical rollers and metal retainers, for bearing and constant velocity (CV)-joint. Within its Precision Engineered Products Group, it designs and manufactures a range of high-precision metal and plastic components, assemblies and finished devices. Within its Autocam Precision Components Group, the Company manufactures highly engineered, difficult-to-manufacture precision metal components and subassemblies.
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