Regal Beloit (NYSE: RBC) and NL Industries (NYSE:NL) are both industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of recent ratings and price targets for Regal Beloit and NL Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Regal Beloit 0 5 5 0 2.50
NL Industries 1 0 0 0 1.00

Regal Beloit presently has a consensus price target of $86.63, indicating a potential upside of 9.38%. NL Industries has a consensus price target of $14.00, indicating a potential downside of 1.06%. Given Regal Beloit’s stronger consensus rating and higher possible upside, analysts plainly believe Regal Beloit is more favorable than NL Industries.

Dividends

Regal Beloit pays an annual dividend of $1.04 per share and has a dividend yield of 1.3%. NL Industries does not pay a dividend. Regal Beloit pays out 22.6% of its earnings in the form of a dividend. Regal Beloit has raised its dividend for 7 consecutive years.

Profitability

This table compares Regal Beloit and NL Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Regal Beloit 6.28% 9.76% 4.84%
NL Industries 67.61% 33.69% 17.82%

Risk and Volatility

Regal Beloit has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, NL Industries has a beta of 2.87, indicating that its share price is 187% more volatile than the S&P 500.

Valuation and Earnings

This table compares Regal Beloit and NL Industries’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Regal Beloit $3.22 billion 1.09 $203.40 million $4.60 17.22
NL Industries $108.90 million 6.33 $15.32 million $1.57 9.01

Regal Beloit has higher revenue and earnings than NL Industries. NL Industries is trading at a lower price-to-earnings ratio than Regal Beloit, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

93.8% of Regal Beloit shares are held by institutional investors. Comparatively, 9.3% of NL Industries shares are held by institutional investors. 2.2% of Regal Beloit shares are held by company insiders. Comparatively, 0.1% of NL Industries shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Regal Beloit beats NL Industries on 11 of the 17 factors compared between the two stocks.

Regal Beloit Company Profile

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.

NL Industries Company Profile

NL Industries, Inc. is a holding company. The Company operates in the component products industry through its subsidiary, CompX International Inc. (CompX). The Company operates in the chemicals industry through its non-controlling interest in Kronos Worldwide, Inc. (Kronos). The Company, through Compx, manufactures engineered components that are sold to a range of industries, including recreational transportation (including boats), postal, office and institutional furniture, cabinetry, tool storage, healthcare, gas stations and vending equipment. Kronos is a global producer and marketer of value-added titanium dioxide pigments (TiO2), a base industrial product used in imparting whiteness, brightness and opacity to a range of customer applications and end use markets, including coatings, plastics, paper, inks, food, cosmetics, and other industrial and consumer products. Kronos has production facilities in Europe and North America.

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