Comparing Brady (BRC) and H&E Equipment Services (HEES)
Brady (NYSE: BRC) and H&E Equipment Services (NASDAQ:HEES) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.
Institutional & Insider Ownership
76.8% of Brady shares are owned by institutional investors. Comparatively, 75.5% of H&E Equipment Services shares are owned by institutional investors. 15.6% of Brady shares are owned by company insiders. Comparatively, 12.0% of H&E Equipment Services shares are owned by company 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.
This table compares Brady and H&E Equipment Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|H&E Equipment Services||3.69%||38.83%||4.30%|
Brady pays an annual dividend of $0.83 per share and has a dividend yield of 2.1%. H&E Equipment Services pays an annual dividend of $1.10 per share and has a dividend yield of 2.7%. Brady pays out 44.1% of its earnings in the form of a dividend. H&E Equipment Services pays out 107.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. H&E Equipment Services has increased its dividend for 32 consecutive years. H&E Equipment Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent recommendations for Brady and H&E Equipment Services, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|H&E Equipment Services||0||0||3||0||3.00|
Brady presently has a consensus price target of $40.50, suggesting a potential upside of 3.98%. H&E Equipment Services has a consensus price target of $34.00, suggesting a potential downside of 16.71%. Given Brady’s higher probable upside, equities research analysts clearly believe Brady is more favorable than H&E Equipment Services.
Risk and Volatility
Brady has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, H&E Equipment Services has a beta of 2.9, suggesting that its share price is 190% more volatile than the S&P 500.
Valuation and Earnings
This table compares Brady and H&E Equipment Services’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Brady||$1.11 billion||1.80||$95.64 million||$1.88||20.72|
|H&E Equipment Services||$978.14 million||1.49||$37.17 million||$1.02||40.02|
Brady has higher revenue and earnings than H&E Equipment Services. Brady is trading at a lower price-to-earnings ratio than H&E Equipment Services, indicating that it is currently the more affordable of the two stocks.
Brady beats H&E Equipment Services on 10 of the 17 factors compared between the two stocks.
Brady Company Profile
Brady Corporation is a manufacturer and supplier of identification solutions and workplace safety products that identify and protect premises, products and people. The Company has two segments: Identification Solutions (IDS) and Workplace Safety (WPS). The IDS segment includes identification and healthcare products, and the WPS segment includes workplace safety and compliance products. The IDS segment offers products that are manufactured under various brands, including the Brady brand, and are primarily sold through distribution to a range of maintenance, repair and operations (MRO) and original equipment manufacturing (OEM) customers, and through other channels. The WPS segment offers a range of product categories, such as safety and compliance signs, tags, and labels; informational and architectural signage; industrial warehouse and office equipment, and labor law compliance posters. Its brands include Electromark, Identicard, PromoVision, Scafftag, Seton and Emedco.
H&E Equipment Services Company Profile
H&E Equipment Services, Inc. is an integrated equipment services company. The Company is focused on heavy construction and industrial equipment. As of December 31, 2016, the Company rented, sold and provided parts and services support for four core categories of specialized equipment: hi-lift or aerial work platform equipment; cranes; earthmoving equipment, and industrial lift trucks. The Company’s principal business activities include equipment rentals; new equipment sales; used equipment sales; parts sales, and repair and maintenance services. As of February 16, 2017, the Company had 78 facilities located throughout the West Coast, Intermountain, Southwest, Gulf Coast, Southeast and Mid-Atlantic regions of the United States. The Company rents its heavy construction and industrial equipment to its customers on a daily, weekly and monthly basis. The Company sells new heavy construction and industrial equipment. The Company is a distributor of Grove and Manitowoc crane equipment.
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