Checkpoint Systems (NYSE: CKP) and Ritchie Bros. Auctioneers (NYSE:RBA) are both industrials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.

Insider and Institutional Ownership

96.1% of Ritchie Bros. Auctioneers shares are held by institutional investors. 0.4% of Ritchie Bros. Auctioneers shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Ritchie Bros. Auctioneers pays an annual dividend of $0.68 per share and has a dividend yield of 2.3%. Checkpoint Systems does not pay a dividend. Ritchie Bros. Auctioneers pays out 144.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ritchie Bros. Auctioneers has increased its dividend for 14 consecutive years.

Profitability

This table compares Checkpoint Systems and Ritchie Bros. Auctioneers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Checkpoint Systems -27.26% -50.16% -20.24%
Ritchie Bros. Auctioneers 8.96% 14.72% 6.14%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Checkpoint Systems and Ritchie Bros. Auctioneers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Checkpoint Systems 0 0 0 0 N/A
Ritchie Bros. Auctioneers 2 5 3 0 2.10

Ritchie Bros. Auctioneers has a consensus target price of $31.78, indicating a potential upside of 6.46%. Given Ritchie Bros. Auctioneers’ higher possible upside, analysts clearly believe Ritchie Bros. Auctioneers is more favorable than Checkpoint Systems.

Earnings and Valuation

This table compares Checkpoint Systems and Ritchie Bros. Auctioneers’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Checkpoint Systems N/A N/A N/A N/A N/A
Ritchie Bros. Auctioneers $566.33 million 5.65 $203.46 million $0.47 63.51

Ritchie Bros. Auctioneers has higher revenue and earnings than Checkpoint Systems.

Summary

Ritchie Bros. Auctioneers beats Checkpoint Systems on 10 of the 11 factors compared between the two stocks.

About Checkpoint Systems

Checkpoint Systems, Inc. is a United States-based supplier of merchandise availability solutions for the retail industry. The Company provides end-to-end solutions enabling retailers to achieve real-time inventory, accelerate the replenishment cycle, prevent out-of-stocks and reduce theft. It offers merchandise availability solutions, such as shrink management, including antennas, labels and tags, source tagging, deactivation, remote service and support, and Alpha High Theft Solutions, and merchandise visibility solutions, including inventory management, asset tracking and OneTag Program. OneTag Program allows retailers to obtain the benefits of inventory visibility and loss prevention with a single radio frequency identification tag. It offers apparel labelling solutions, such as Trim, including woven labels, printed fabric labels and specialty trim services, and brand merchandising, including printed items and self-adhesive. It serves markets, such as electronics and grocery.

About Ritchie Bros. Auctioneers

Ritchie Bros Auctioneers Inc is a Canada-based holding company. The Company is an industrial auctioneer and used equipment distributor, selling used equipment and other assets. Its segments include Core Auction, which is a network of auction locations that conduct live, unreserved auctions with both on-site and online bidding, and Other, which includes its EquipmentOne and Mascus International Holding B.V. (Mascus) online services. EquipmentOne is an online marketplace that equipment sellers can navigate independently. EquipmentOne facilitates the completion of sales through a settlement process managed by EquipmentOne that protects both the seller and the buyer. Mascus is an online equipment listing service for used heavy machinery and trucks. It offers subscriptions to equipment dealers, brokers, exporters and equipment manufacturers to list equipment available for sale at a listed price. The Company, through Mascus, provides online advertising services, business tools and solutions.

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