Barnes Group (B) & SPX Flow (FLOW) Critical Review

Barnes Group (NYSE: B) and SPX Flow (NYSE:FLOW) are both industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.

Insider & Institutional Ownership

86.2% of Barnes Group shares are owned by institutional investors. Comparatively, 86.7% of SPX Flow shares are owned by institutional investors. 8.5% of Barnes Group shares are owned by insiders. Comparatively, 3.0% of SPX Flow shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Barnes Group and SPX Flow, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Barnes Group 0 3 3 0 2.50
SPX Flow 2 1 4 0 2.29

Barnes Group presently has a consensus price target of $67.00, suggesting a potential upside of 10.45%. SPX Flow has a consensus price target of $48.50, suggesting a potential upside of 3.35%. Given Barnes Group’s stronger consensus rating and higher probable upside, research analysts clearly believe Barnes Group is more favorable than SPX Flow.

Risk and Volatility

Barnes Group has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, SPX Flow has a beta of 2.43, suggesting that its stock price is 143% more volatile than the S&P 500.

Dividends

Barnes Group pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. SPX Flow does not pay a dividend. Barnes Group pays out 19.7% of its earnings in the form of a dividend. Barnes Group has increased its dividend for 5 consecutive years.

Profitability

This table compares Barnes Group and SPX Flow’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Barnes Group 11.20% 12.44% 6.96%
SPX Flow 2.38% 6.13% 2.00%

Valuation and Earnings

This table compares Barnes Group and SPX Flow’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Barnes Group $1.23 billion 2.64 $135.60 million $2.84 21.36
SPX Flow $1.95 billion 1.02 $46.40 million $1.08 43.45

Barnes Group has higher earnings, but lower revenue than SPX Flow. Barnes Group is trading at a lower price-to-earnings ratio than SPX Flow, indicating that it is currently the more affordable of the two stocks.

Summary

Barnes Group beats SPX Flow on 11 of the 17 factors compared between the two stocks.

Barnes Group Company Profile

Barnes Group Inc. is an industrial and aerospace manufacturer and service provider, serving a range of end markets and customers. The Company’s engineered products, industrial technologies, and solutions are used in applications that provide transportation, manufacturing, healthcare products and technology to the world. Its segments include Industrial and Aerospace. The Industrial segment is engaged in the manufacturing of precision parts, products and systems for applications serving a customer base in end-markets, such as transportation, industrial equipment, consumer products, packaging, electronics, medical devices and energy. The Industrial segment includes the Molding Solutions, Nitrogen Gas Products and Engineered Components business units. The Aerospace segment includes the original equipment manufacturer (OEM) business and the aftermarket business, which includes maintenance repair and overhaul services and the manufacture and delivery of aerospace aftermarket spare parts.

SPX Flow Company Profile

SPX FLOW, Inc. is a global supplier of engineered solutions. As of December 31, 2016, the Company had operations in over 30 countries and sales in over 150 countries around the world. The Company operates in three business segments: Food and Beverage, Power and Energy, and Industrial. Its product portfolio of pumps, valves, mixers, filters, air dryers, hydraulic tools, homogenizers, separators and heat exchangers, along with the related aftermarket parts and services, supports global industries, including food and beverage, oil and gas, power generation, chemical processing, compressed air and mining. The Food and Beverage segment’s products include mixing, drying, evaporation and separation systems and components, heat exchangers, and reciprocating and centrifugal pump technologies. Its products in the Power and Energy segment include pumps, valves and the related accessories. Its products in the Industrial segment are filtration equipment, hydraulic technologies and heat exchangers.

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