Financial Contrast: Parker-Hannifin (NYSE:PH) versus Wartsila (OTCMKTS:WRTBY)

Wartsila (OTCMKTS:WRTBY) and Parker-Hannifin (NYSE:PH) are both large-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Wartsila and Parker-Hannifin, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wartsila	3	3	1	0	1.71
Parker-Hannifin	0	3	16	0	2.84

Parker-Hannifin has a consensus price target of $1,119.55, suggesting a potential upside of 13.64%. Given Parker-Hannifin’s stronger consensus rating and higher probable upside, analysts plainly believe Parker-Hannifin is more favorable than Wartsila.

Dividends

Wartsila pays an annual dividend of $0.04 per share and has a dividend yield of 0.6%. Parker-Hannifin pays an annual dividend of $8.00 per share and has a dividend yield of 0.8%. Wartsila pays out 15.4% of its earnings in the form of a dividend. Parker-Hannifin pays out 28.1% 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. Parker-Hannifin has raised its dividend for 70 consecutive years. Parker-Hannifin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Wartsila and Parker-Hannifin”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wartsila	$7.82 billion	2.60	$708.26 million	$0.26	26.46
Parker-Hannifin	$21.50 billion	5.78	$3.65 billion	$28.49	34.58

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

Risk and Volatility

Wartsila has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Parker-Hannifin has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Insider & Institutional Ownership

82.4% of Parker-Hannifin shares are owned by institutional investors. 0.3% of Parker-Hannifin shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Wartsila and Parker-Hannifin’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wartsila	9.77%	25.56%	8.08%
Parker-Hannifin	16.97%	28.48%	13.49%

Summary

Parker-Hannifin beats Wartsila on 15 of the 17 factors compared between the two stocks.

About Wartsila

Wärtsilä Oyj Abp offers technologies and lifecycle solutions for the marine and energy markets worldwide. It offers engine power plant products, such as gas, multi-fuel, and diesel engines; GEMS Digital Energy Platform, a smart software platform that monitors, controls, and optimizes energy assets on site and portfolio levels; GridSolv Quantum, a fully integrated energy storage solution, which enables ease of deployment and sustainable energy optimization; GEMS Power Plant Controllers; GEMS Fleet Director, which provides centralized real-time visibility into a global fleet of power plants; and GEMS Grid Controller that conducts intelligent grid control and optimized power management for microgrids of various sizes. The company also provides GEMS smart energy management software platform to remotely monitor, operate, identify, and diagnose assets; lifecycle solutions for power plants; power and propulsion products, such as electric shipping and hybrid ships, engine and generating sets, propulsors and gears, and shaft line solutions; liquid and gas handling products, including ballast water management, freshwater generation, waste and wastewater treatment, gas solutions, and exhaust treatment equipment; port and fleet optimization; simulation and training solutions; and automation, navigation, and control systems. The company was founded in 1834 and is headquartered in Helsinki, Finland.

About Parker-Hannifin

Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. The company operates through two segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial segment offers sealing, shielding, thermal products and systems, adhesives, coatings, and noise vibration and harshness solutions; filters, systems, and diagnostics solutions to ensure purity and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors used in fluid and gas handling; and hydraulic, pneumatic, and electromechanical components and systems for builders and users of mobile and industrial machinery and equipment. This segment sells its products to original equipment manufacturers (OEMs) and distributors who serve the replacement markets in manufacturing, packaging, processing, transportation, construction, refrigeration and air conditioning, agricultural, and military machinery and equipment industries. The Aerospace Systems segment offers products for use in commercial and military airframe and engine programs, such as control actuation systems and components, engine build-up ducting, engine exhaust nozzles and assemblies, engine systems and components, fluid conveyance systems and components, fuel systems and components, fuel tank inerting systems, hydraulic systems and components, lubrication components, avionics, sensors, pneumatic control components, thermal management products, fire detection and suppression systems and components, and wheels and brakes, as well as fluid metering, delivery, and atomization devices. This segment markets its products directly to OEMs and end users. The company markets its products through direct-sales employees, independent distributors, and sales representatives. Parker-Hannifin Corporation was founded in 1917 and is headquartered in Cleveland, Ohio.