Head to Head Survey: Rockwell Automation (NYSE:ROK) versus AZZ (AZZ)

Rockwell Automation (NYSE: ROK) and AZZ (NYSE:AZZ) are both industrial products companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Earnings & Valuation



This table compares Rockwell Automation and AZZ’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rockwell Automation $6.18 billion 3.91 $1.22 billion $6.20 30.33
AZZ $820.18 million 1.50 $143.90 million $1.97 24.11

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

Risk and Volatility

Rockwell Automation has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500. Comparatively, AZZ has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500.

Insider and Institutional Ownership

73.6% of Rockwell Automation shares are held by institutional investors. Comparatively, 85.5% of AZZ shares are held by institutional investors. 1.7% of Rockwell Automation shares are held by company insiders. Comparatively, 0.0% of AZZ shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Rockwell Automation and AZZ, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rockwell Automation 1 11 2 0 2.07
AZZ 0 1 0 0 2.00

Rockwell Automation presently has a consensus price target of $159.42, suggesting a potential downside of 15.22%. AZZ has a consensus price target of $52.00, suggesting a potential upside of 9.47%. Given AZZ’s higher possible upside, analysts clearly believe AZZ is more favorable than Rockwell Automation.

Dividends

Rockwell Automation pays an annual dividend of $3.04 per share and has a dividend yield of 1.6%. AZZ pays an annual dividend of $0.68 per share and has a dividend yield of 1.4%. Rockwell Automation pays out 49.0% of its earnings in the form of a dividend. AZZ pays out 34.5% 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. Rockwell Automation has increased its dividend for 7 consecutive years and AZZ has increased its dividend for 3 consecutive years. Rockwell Automation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Rockwell Automation and AZZ’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rockwell Automation 13.04% 40.71% 12.03%
AZZ 6.27% 9.65% 5.13%

Summary

Rockwell Automation beats AZZ on 13 of the 17 factors compared between the two stocks.

About Rockwell Automation

Rockwell Automation, Inc. (Rockwell Automation) is a provider of industrial automation power, control and information solutions for manufacturers. The Company operates through two segments: Architecture & Software and Control Products & Solutions. The Architecture & Software segment contains various hardware, software and communication components of the Company’s integrated control and information architecture capable of controlling the customer’s industrial processes and connecting with their manufacturing enterprise. Architecture & Software has a portfolio of products, including Control platforms that perform multiple control disciplines and monitoring of applications, including discrete, batch and continuous process, drives control, motion control and machine safety control. The Control Products & Solutions segment portfolio includes low and medium voltage electro-mechanical and electronic motor starters, signaling devices, termination and protection devices, relays and timers.

About AZZ

AZZ Inc. is a provider of galvanizing services, welding solutions, specialty electrical equipment and engineered services to the power generation, transmission, distribution, refining and industrial markets. The Company operates through two segments: Energy segment and Galvanizing segment. Its Energy segment provides products and services designed to support industrial, nuclear and electrical applications. Its product offerings include custom switchgear, electrical enclosures, medium and high voltage bus ducts, explosion proof and hazardous duty lighting, nuclear safety-related equipment and tubular products. Its Galvanizing segment provides hot dip galvanizing to the steel fabrication industry through facilities located throughout the United States and Canada. It serves fabricators or manufacturers that provide services to the electrical and telecommunications, bridge and highway, petrochemical and general industrial markets and various original equipment manufacturers.

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