Comparing Otis Worldwide (NYSE:OTIS) & Fanuc (OTCMKTS:FANUY)

Otis Worldwide (NYSE:OTIS) and Fanuc (OTCMKTS:FANUY) are both large-cap industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Earnings & Valuation

This table compares Otis Worldwide and Fanuc”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Otis Worldwide	$14.91 billion	1.75	$1.38 billion	$3.89	17.62
Fanuc	$5.70 billion	6.35	$1.10 billion	$0.62	29.69

Otis Worldwide has higher revenue and earnings than Fanuc. Otis Worldwide is trading at a lower price-to-earnings ratio than Fanuc, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Otis Worldwide and Fanuc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Otis Worldwide	10.17%	-28.50%	14.39%
Fanuc	20.11%	9.60%	8.65%

Analyst Recommendations

This is a summary of current ratings for Otis Worldwide and Fanuc, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Otis Worldwide	1	5	4	0	2.30
Fanuc	0	2	0	1	2.67

Otis Worldwide currently has a consensus target price of $92.91, suggesting a potential upside of 35.57%. Given Otis Worldwide’s higher probable upside, research analysts clearly believe Otis Worldwide is more favorable than Fanuc.

Volatility and Risk

Otis Worldwide has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, Fanuc has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Institutional & Insider Ownership

88.0% of Otis Worldwide shares are held by institutional investors. Comparatively, 1.5% of Fanuc shares are held by institutional investors. 0.1% of Otis Worldwide shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Otis Worldwide pays an annual dividend of $1.76 per share and has a dividend yield of 2.6%. Fanuc pays an annual dividend of $0.21 per share and has a dividend yield of 1.1%. Otis Worldwide pays out 45.2% of its earnings in the form of a dividend. Fanuc pays out 33.9% 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. Otis Worldwide has raised its dividend for 5 consecutive years. Otis Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Otis Worldwide beats Fanuc on 10 of the 18 factors compared between the two stocks.

About Otis Worldwide

Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. This segment serves real-estate and building developers, and general contractors. It sells its products directly to customers, as well as through agents and distributors. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. Otis Worldwide Corporation was founded in 1853 and is headquartered in Farmington, Connecticut.

About Fanuc

FANUC Corporation provides factory automation products in Japan, the Americas, Europe, China, the rest of Asia, and internationally. The company offers CNC series products, servo motors, lasers, robots, compact machining centers, electric injection molding machines, wire electrical discharge machines, and ultra-precision machines. It also provides FANUC intelligent edge link and drive system, an open platform for the manufacturing industry. FANUC Corporation was incorporated in 1950 and is headquartered in Yamanashi, Japan.