Critical Comparison: Regal Rexnord (RRX) versus Its Peers

Regal Rexnord (NYSE:RRX) is one of 218 public companies in the “Electrical Equipment” industry, but how does it weigh in compared to its competitors? We will compare Regal Rexnord to similar businesses based on the strength of its analyst recommendations, valuation, dividends, profitability, institutional ownership, earnings and risk.

Profitability

This table compares Regal Rexnord and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Regal Rexnord	3.77%	10.28%	5.13%
Regal Rexnord Competitors	-372.62%	-44.70%	-7.06%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Regal Rexnord and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regal Rexnord	0	3	8	0	2.73
Regal Rexnord Competitors	2312	5196	7247	440	2.38

Regal Rexnord currently has a consensus target price of $231.25, indicating a potential upside of 26.26%. As a group, “Electrical Equipment” companies have a potential upside of 44.96%. Given Regal Rexnord’s competitors higher probable upside, analysts plainly believe Regal Rexnord has less favorable growth aspects than its competitors.

Insider & Institutional Ownership

99.7% of Regal Rexnord shares are held by institutional investors. Comparatively, 37.4% of shares of all “Electrical Equipment” companies are held by institutional investors. 0.6% of Regal Rexnord shares are held by company insiders. Comparatively, 14.9% of shares of all “Electrical Equipment” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

Regal Rexnord has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, Regal Rexnord’s competitors have a beta of -20.13, suggesting that their average stock price is 2,113% less volatile than the S&P 500.

Earnings & Valuation

This table compares Regal Rexnord and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Regal Rexnord	$6.15 billion	$279.50 million	52.93
Regal Rexnord Competitors	$2.47 billion	$148.77 million	20.47

Regal Rexnord has higher revenue and earnings than its competitors. Regal Rexnord is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

Regal Rexnord pays an annual dividend of $1.40 per share and has a dividend yield of 0.8%. Regal Rexnord pays out 40.5% of its earnings in the form of a dividend. As a group, “Electrical Equipment” companies pay a dividend yield of 1.5% and pay out 27.0% of their earnings in the form of a dividend. Regal Rexnord lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Regal Rexnord beats its competitors on 10 of the 15 factors compared.

Regal Rexnord Company Profile

Regal Rexnord Corporation designs, manufactures and sells products and systems that transmit power, control motion and move materials. Its offerings include electric motors, gear drives, bearings, couplings, clutches, brakes, conveyor components and automation technologies. The company serves customers in a range of industries, including industrial manufacturing, food and beverage, energy, commercial buildings and residential applications. Its products are used in equipment and systems such as factory machinery, conveyors, HVAC systems and material-handling operations.