Rockwell Automation (ROK) & AZZ (AZZ) Head to Head Analysis

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

Insider & Institutional Ownership

87.9% of AZZ shares are owned by institutional investors. Comparatively, 73.0% of Rockwell Automation shares are owned by institutional investors. 0.0% of AZZ shares are owned by insiders. Comparatively, 1.7% of Rockwell Automation shares are owned by 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.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AZZ 0 1 0 0 2.00
Rockwell Automation 1 10 3 0 2.14

AZZ presently has a consensus price target of $52.00, indicating a potential upside of 9.47%. Rockwell Automation has a consensus price target of $161.73, indicating a potential downside of 15.09%. Given AZZ’s higher probable upside, research analysts clearly believe AZZ is more favorable than Rockwell Automation.

Risk & Volatility

AZZ has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500. Comparatively, Rockwell Automation has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.

Dividends

AZZ pays an annual dividend of $0.68 per share and has a dividend yield of 1.4%. Rockwell Automation pays an annual dividend of $3.34 per share and has a dividend yield of 1.8%. AZZ pays out 34.5% of its earnings in the form of a dividend. Rockwell Automation pays out 52.7% 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. AZZ has raised its dividend for 7 consecutive years and Rockwell Automation has raised its dividend for 3 consecutive years.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AZZ $858.93 million 1.44 $60.92 million $1.97 24.11
Rockwell Automation $6.31 billion 3.88 $825.70 million $6.34 30.04

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.

Profitability

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

Net Margins Return on Equity Return on Assets
AZZ 6.27% 9.65% 5.13%
Rockwell Automation 13.08% 38.67% 12.32%

Summary

Rockwell Automation beats AZZ on 12 of the 17 factors compared between the two stocks.

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.

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.

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