Komatsu (OTCMKTS:KMTUY) versus Franklin Electric (NASDAQ:FELE) Financial Contrast

Franklin Electric (NASDAQ:FELE) and Komatsu (OTCMKTS:KMTUY) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Profitability

This table compares Franklin Electric and Komatsu’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Electric	7.06%	15.18%	10.13%
Komatsu	8.93%	10.51%	5.93%

Insider and Institutional Ownership

80.0% of Franklin Electric shares are owned by institutional investors. Comparatively, 0.2% of Komatsu shares are owned by institutional investors. 2.9% of Franklin Electric shares are owned by insiders. Comparatively, 2.9% of Komatsu shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Franklin Electric pays an annual dividend of $1.12 per share and has a dividend yield of 1.2%. Komatsu pays an annual dividend of $0.89 per share and has a dividend yield of 2.0%. Franklin Electric pays out 32.3% of its earnings in the form of a dividend. Komatsu pays out 32.6% 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. Franklin Electric has increased its dividend for 33 consecutive years.

Volatility & Risk

Franklin Electric has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Komatsu has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Franklin Electric and Komatsu, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Electric	0	3	0	0	2.00
Komatsu	0	1	0	0	2.00

Franklin Electric presently has a consensus target price of $114.50, indicating a potential upside of 19.33%. Given Franklin Electric’s higher probable upside, research analysts plainly believe Franklin Electric is more favorable than Komatsu.

Earnings & Valuation

This table compares Franklin Electric and Komatsu”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Electric	$2.21 billion	1.92	$147.09 million	$3.47	27.65
Komatsu	$27.45 billion	1.55	$2.48 billion	$2.73	16.71

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

Summary

Franklin Electric beats Komatsu on 9 of the 15 factors compared between the two stocks.

About Franklin Electric

Franklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. The company operates through Water Systems, Fueling Systems, and Distribution segments. The Water Systems segment offers submersible motors, drives, pumps, electronic controls, water treatment systems, monitoring devices, and related parts and equipment. Its motors and pumps are used principally for pumping clean water and wastewater in various residential, agricultural, municipal, and industrial applications; and manufactures electronic drives and controls that are used in motors for controlling functionality, as well as provides protection from various hazards, such as electrical surges, over-heating, and dry wells or tanks. The Fueling Systems segment provides pumps, pipes, sumps, fittings, vapor recovery components, electronic controls, monitoring devices, and related parts and equipment primarily for use in fueling system applications. This segment serves other energy markets, such as power reliability systems, as well as includes electronic devices for online monitoring of the power utility, hydroelectric, and telecommunication and data center infrastructure. The Distribution segment sells to and provides presale support and specifications to the installing contractors. It sells products produced by the Water Systems segment. The company sells its products to wholesale and retail distributors, specialty distributors, original equipment manufacturers, industrial and petroleum equipment distributors, and oil and utility companies through its employee sales force and independent manufacturing representatives. Franklin Electric Co., Inc. was founded in 1944 and is headquartered in Fort Wayne, Indiana.

About Komatsu

Komatsu Ltd. manufactures and sells construction, mining, and utility equipment in Japan, the Americas, Europe, China, Rest of Asia, Oceania, the Middle East, Africa, and CIS countries. It operates through three segments: Construction, Mining and Utility Equipment; Retail Finance; and Industrial Machinery and Others. The company offers construction and mining equipment, including excavators, wheel loaders, bulldozers, motor graders, dump truck, rope and hybrid shovels, electric wheel loaders, continuous miners, and jumbo drills. It also provides forestry equipment, including harvesters, forwarders, feller bunchers, excavators, mini excavators, and forklifts; demolition, waste, and recycling equipment, such as mobile crushers, hydraulic excavators, wheel loaders, and mini shovels; material handling equipment; and tunnel-boring machines, pipe layers, towing tractors, and engines. In addition, the company offers industrial machinery, including presses, sheet-metal machinery, 3D laser cutting machine, transfer machines, battery manufacturing equipment, wire saws, thermos modules, thermoelectric generation module, and temperature control products; quarry equipment; agricultural and livestock equipment; EH sensor device; iron and steel casting products; and logistics equipment. Further, the company provides retail financing; construction machinery rental services; remanufactured products; other support services; transportation, warehousing, packing, and other services; and purchases and sells used equipment. Komatsu Ltd. was founded in 1884 and is headquartered in Tokyo, Japan.