Financial Comparison: ESCO Technologies (NYSE:ESE) versus Fanuc (OTCMKTS:FANUY)

ESCO Technologies (NYSE:ESE) and Fanuc (OTCMKTS:FANUY) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Risk & Volatility

ESCO Technologies has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Fanuc has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Insider & Institutional Ownership

95.7% of ESCO Technologies shares are held by institutional investors. Comparatively, 1.5% of Fanuc shares are held by institutional investors. 0.7% of ESCO Technologies shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares ESCO Technologies and Fanuc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ESCO Technologies	24.39%	13.28%	8.69%
Fanuc	20.11%	9.60%	8.65%

Dividends

ESCO Technologies pays an annual dividend of $0.32 per share and has a dividend yield of 0.1%. Fanuc pays an annual dividend of $0.21 per share and has a dividend yield of 1.1%. ESCO Technologies pays out 2.6% 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.

Analyst Ratings

This is a summary of recent ratings and target prices for ESCO Technologies and Fanuc, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ESCO Technologies	0	1	3	1	3.00
Fanuc	0	2	0	1	2.67

ESCO Technologies currently has a consensus target price of $416.50, indicating a potential upside of 58.65%. Given ESCO Technologies’ stronger consensus rating and higher possible upside, research analysts clearly believe ESCO Technologies is more favorable than Fanuc.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ESCO Technologies	$1.29 billion	5.27	$299.22 million	$12.14	21.63
Fanuc	$5.70 billion	6.55	$1.10 billion	$0.62	30.64

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

Summary

ESCO Technologies beats Fanuc on 11 of the 16 factors compared between the two stocks.

About ESCO Technologies

ESCO Technologies Inc. produces and supplies engineered products and systems for industrial and commercial markets worldwide. It operates through three segments: Aerospace & Defense, Utility Solutions Group, and RF Test & Measurement. The Aerospace & Defense segment designs and manufactures filtration products, including hydraulic filter elements and fluid control devices used in commercial aerospace applications; filter mechanisms used in micro-propulsion devices for satellites; and custom designed filters for manned aircraft and submarines. It also designs, develops, and manufactures elastomeric-based signature reduction solutions for U.S. naval vessels; and mission-critical bushings, pins, sleeves, and precision-tolerance machined components for landing gear, rotor heads, engine mounts, flight controls, and actuation systems for the aerospace and defense industries. The Utility Solutions Group segment provides diagnostic testing solutions that enable electric power grid operators to assess the integrity of high-voltage power delivery equipment; and decision support tools for the renewable energy industry, primarily wind and solar. The RF Test & Measurement segment designs and manufactures RF test and secure communication facilities, acoustic test enclosures, RF and magnetically shielded rooms, RF measurement systems, and broadcast and recording studios; and RF absorptive materials, filters, antennas, field probes, test cells, proprietary measurement software, and other test accessories to perform various tests. The company distributes its products through a network of distributors, sales representatives, direct sales teams, and in-house sales personnel. The company was incorporated in 1990 and is based in Saint Louis, Missouri.

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.