Regal Beloit Corporation (RBC) and MTS Systems (MTSC) Head to Head Contrast

Regal Beloit Corporation (NYSE: RBC) and MTS Systems (NASDAQ:MTSC) are both industrial products companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Institutional and Insider Ownership

93.0% of Regal Beloit Corporation shares are held by institutional investors. 2.2% of Regal Beloit Corporation shares are held by company insiders. Comparatively, 1.8% of MTS Systems shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Regal Beloit Corporation has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500. Comparatively, MTS Systems has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Regal Beloit Corporation and MTS Systems, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Regal Beloit Corporation 0 5 5 0 2.50
MTS Systems 0 1 2 0 2.67

Regal Beloit Corporation presently has a consensus target price of $86.14, indicating a potential upside of 14.40%. MTS Systems has a consensus target price of $61.00, indicating a potential upside of 16.41%. Given MTS Systems’ stronger consensus rating and higher possible upside, analysts clearly believe MTS Systems is more favorable than Regal Beloit Corporation.

Dividends

Regal Beloit Corporation pays an annual dividend of $1.04 per share and has a dividend yield of 1.4%. MTS Systems pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. Regal Beloit Corporation pays out 22.6% of its earnings in the form of a dividend. MTS Systems pays out 91.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Regal Beloit Corporation has increased its dividend for 7 consecutive years.

Valuation & Earnings

This table compares Regal Beloit Corporation and MTS Systems’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Regal Beloit Corporation $3.22 billion 1.03 $203.40 million $4.60 16.37
MTS Systems $650.15 million 1.37 $27.49 million $1.31 40.00

Regal Beloit Corporation has higher revenue and earnings than MTS Systems. Regal Beloit Corporation is trading at a lower price-to-earnings ratio than MTS Systems, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Regal Beloit Corporation and MTS Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Regal Beloit Corporation 6.28% 9.76% 4.84%
MTS Systems 5.48% 10.34% 3.62%

Summary

Regal Beloit Corporation beats MTS Systems on 11 of the 17 factors compared between the two stocks.

Regal Beloit Corporation Company Profile

Regal Beloit Corporation is a manufacturer of electric motors, electrical motion controls, power generation and power transmission products. The Company operates through three segments: the Commercial and Industrial Systems segment, with its principal line of business in medium and large electric motors, power generation products, high-performance drives and controls and capacitors; the Climate Solutions segment, with its principal line of business in small motors, controls and air moving products, and the Power Transmission Solutions segment, with its principal line of business in power transmission gearing, hydraulic pump drives, open gearing and specialty mechanical products which control motion and torque. It sells its products directly to original equipment manufacturers (OEMs), distributors and end users. It operates distribution facilities in Plainfield, Indiana; McAllen, Texas; LaVergne, Tennessee, and Florence, Kentucky.

MTS Systems Company Profile

MTS Systems Corporation is a supplier of test systems and position sensors. The Company operates through two segments: Test and Sensors. The Test segment provides testing solutions, including hardware, software and services to ground vehicles, materials and structures markets. The Sensors segment provides position sensors for a range of industrial and mobile hydraulic applications. The Sensors segment products are used by industrial machinery and mobile equipment manufacturers to automate the operation of their products for safety and end-user productivity. The Sensors segment manufactures products utilizing magnetostriction technology. Its technology, Temposonics, offers non-contact position sensing. Its Temposonics sensors provide position feedback for motion control systems. It also provides various service offerings, including calibration, maintenance, training and consulting. The Company has its manufacturing facilities in North America, Europe and Asia.

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