Analyzing Eaton Corporation, PLC (ETN) & ITT (ITT)
Eaton Corporation, PLC (NYSE: ETN) and ITT (NYSE:ITT) are both mid-cap industrial products companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.
Valuation & Earnings
This table compares Eaton Corporation, PLC and ITT’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Eaton Corporation, PLC||$19.83 billion||1.59||$3.22 billion||$4.38||16.14|
|ITT||$2.43 billion||1.43||$360.20 million||$2.35||16.79|
Eaton Corporation, PLC has higher revenue and earnings than ITT. Eaton Corporation, PLC is trading at a lower price-to-earnings ratio than ITT, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Eaton Corporation, PLC has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, ITT has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500.
This is a breakdown of current recommendations and price targets for Eaton Corporation, PLC and ITT, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Eaton Corporation, PLC||2||9||7||0||2.28|
Eaton Corporation, PLC currently has a consensus price target of $79.00, suggesting a potential upside of 11.74%. ITT has a consensus price target of $46.33, suggesting a potential upside of 17.45%. Given ITT’s stronger consensus rating and higher possible upside, analysts plainly believe ITT is more favorable than Eaton Corporation, PLC.
This table compares Eaton Corporation, PLC and ITT’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Eaton Corporation, PLC||9.95%||12.93%||6.40%|
Institutional & Insider Ownership
76.8% of Eaton Corporation, PLC shares are held by institutional investors. Comparatively, 95.2% of ITT shares are held by institutional investors. 0.8% of Eaton Corporation, PLC shares are held by insiders. Comparatively, 1.2% of ITT shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Eaton Corporation, PLC pays an annual dividend of $2.40 per share and has a dividend yield of 3.4%. ITT pays an annual dividend of $0.51 per share and has a dividend yield of 1.3%. Eaton Corporation, PLC pays out 54.8% of its earnings in the form of a dividend. ITT pays out 21.7% 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. Eaton Corporation, PLC has increased its dividend for 7 consecutive years and ITT has increased its dividend for 4 consecutive years. Eaton Corporation, PLC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Eaton Corporation, PLC Company Profile
Eaton Corporation (Eaton) is a diversified power management company. It is engaged in the manufacturing of electrical components and systems for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use, and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety. On January 1, 2011, it closed the acquisition of the Tuthill Coupling Group, which is a division of the Tuthill Corporation. It has five segments: Electrical Americas and Electrical Rest of World; Hydraulics; Aerospace; Truck, and Automotive. On October 1, 2010, it acquired CopperLogic, Inc. On July 15, 2010, it acquired EMC Engineers, Inc. In May 2011, it acquired Internormen Technology Group. In August 2011, it acquired IE Power, Inc. In December 2011, it acquired E.A. Pedersen Company.
ITT Company Profile
ITT Corporation (ITT) is a diversified manufacturer of engineered critical components and technology solutions for industrial markets. The Company’s product and service offerings are organized in four segments: Industrial Process, Motion Technologies, Interconnect Solutions and Control Technologies. Industrial Process manufactures engineered fluid process equipment, and is a provider of plant optimization, solutions and aftermarket services and parts. Motion Technologies manufactures brake components, shock absorbers and damping technologies for the automotive, truck and trailer, public bus and rail transportation markets. Interconnect Solutions manufactures and designs a range of engineered connector solutions that makes it possible to transfer signal and power between electronic devices. Control Technologies manufactures equipment, including actuation, valves, and noise and energy absorption components for the aerospace and defense, and industrial markets.
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