Financial Comparison: UniFirst (NYSE:UNF) and Brady (NYSE:BRC)

Brady (NYSE:BRC) and UniFirst (NYSE:UNF) are both mid-cap industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Insider & Institutional Ownership

76.3% of Brady shares are owned by institutional investors. Comparatively, 78.2% of UniFirst shares are owned by institutional investors. 15.6% of Brady shares are owned by company insiders. Comparatively, 0.9% of UniFirst shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Brady has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, UniFirst has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.

Dividends

Brady pays an annual dividend of $0.98 per share and has a dividend yield of 1.1%. UniFirst pays an annual dividend of $1.46 per share and has a dividend yield of 0.5%. Brady pays out 22.7% of its earnings in the form of a dividend. UniFirst pays out 23.0% 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. Brady has increased its dividend for 39 consecutive years and UniFirst has increased its dividend for 7 consecutive years. Brady is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Brady and UniFirst, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brady	0	0	2	0	3.00
UniFirst	0	4	0	0	2.00

Brady currently has a consensus target price of $103.00, suggesting a potential upside of 18.45%. UniFirst has a consensus target price of $246.67, suggesting a potential downside of 10.02%. Given Brady’s stronger consensus rating and higher possible upside, analysts clearly believe Brady is more favorable than UniFirst.

Earnings & Valuation

This table compares Brady and UniFirst”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brady	$1.66 billion	2.45	$205.38 million	$4.31	20.18
UniFirst	$2.49 billion	1.99	$148.27 million	$6.34	43.24

Brady has higher earnings, but lower revenue than UniFirst. Brady is trading at a lower price-to-earnings ratio than UniFirst, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Brady and UniFirst’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brady	12.36%	19.21%	13.83%
UniFirst	4.65%	6.44%	5.03%

Summary

Brady beats UniFirst on 12 of the 16 factors compared between the two stocks.

About Brady

Brady Corporation manufactures and supplies identification solutions (IDS) and workplace safety (WPS) products to identify and protect premises, products, and people in the United States and internationally. The company offers materials, printing systems, RFID, and bar code scanners for product identification, brand protection labeling, work in process labeling, finished product identification, and industrial track and trace applications; safety signs, floor-marking tapes, pipe markers, labeling systems, spill control products, lockout/tagout device, and software and services for safety compliance auditing, procedure writing, and training; and hand-held printers, wire markers, sleeves, and tags for wire identification. It also provides name tags, badges, lanyards, rigid card printing systems, and access control software for people identification; and wristbands, labels, printing systems, and other products for tracking and improving the safety of patients. In addition, the company offers workplace safety, identification, and compliance products, such as safety and compliance signs, tags, labels, and markings; informational signage and markings; asset tracking labels; facility safety and personal protection equipment; first-aid products; and other compliance products for process, government, education, construction, and utilities industries. Further, it provides stock and custom identification products; and sells related resale products. The company serves industrial and electronic manufacturing, healthcare, chemical, oil, gas, automotive, aerospace, governments, mass transit, electrical contractors, education, leisure and entertainment, telecommunications, and other industries through distributors, direct sales force, and digital channels. Brady Corporation was incorporated in 1914 and is headquartered in Milwaukee, Wisconsin.

About UniFirst

UniFirst Corporation provides workplace uniforms and protective work wear clothing in the United States, Europe, and Canada. The company operates through U.S. and Canadian Rental and Cleaning, Manufacturing, Specialty Garments Rental and Cleaning, and First Aid segments. It designs, manufactures, personalizes, rents, cleans, delivers, and sells a range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, and aprons; and specialized protective wear, such as flame resistant and high visibility garments. The company also rents and sells industrial wiping products, floor mats, facility service products, and dry and wet mops; restroom and cleaning supplies comprising air fresheners, paper products, gloves, masks, sanitizers, and hand soaps; and other textile products. In addition, it provides first aid cabinet services and other safety supplies; decontaminates and cleans work clothes, and other items that is exposed to radioactive materials; and services special cleanroom protective wear and facilities. Further, it offers a range of garment service options, including full-service rental programs in which garments are cleaned and serviced; lease programs in which garments are cleaned and maintained by individual employees; and purchase programs to buy garments and related items directly. The company serves automobile service centers and dealers, delivery services, food and general merchandise retailers, food processors and service operations, light manufacturers, maintenance facilities, restaurants, service companies, soft and durable goods wholesalers, transportation companies, healthcare providers, government agencies, research and development laboratories, high technology companies, and utilities operating nuclear reactors, as well as others who require employee clothing for image, identification, protection, or utility purposes. UniFirst Corporation was founded in 1936 and is headquartered in Wilmington, Massachusetts.