Head to Head Analysis: Edgen Group (EDG) versus Ingersoll-Rand (IR)

Edgen Group (NYSE: EDG) and Ingersoll-Rand (NYSE:IR) are both industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Edgen Group and Ingersoll-Rand, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Edgen Group 0 0 0 0 N/A
Ingersoll-Rand 0 7 8 0 2.53

Ingersoll-Rand has a consensus target price of $103.00, suggesting a potential upside of 14.25%. Given Ingersoll-Rand’s higher possible upside, analysts clearly believe Ingersoll-Rand is more favorable than Edgen Group.

Institutional & Insider Ownership

78.9% of Ingersoll-Rand shares are owned by institutional investors. 0.6% of Ingersoll-Rand shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Edgen Group and Ingersoll-Rand’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Edgen Group N/A N/A N/A
Ingersoll-Rand 9.17% 16.91% 6.56%

Dividends

Ingersoll-Rand pays an annual dividend of $1.80 per share and has a dividend yield of 2.0%. Edgen Group does not pay a dividend. Ingersoll-Rand pays out 34.8% of its earnings in the form of a dividend. Edgen Group has increased its dividend for 7 consecutive years.

Earnings & Valuation

This table compares Edgen Group and Ingersoll-Rand’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Edgen Group N/A N/A N/A ($1.68) -7.14
Ingersoll-Rand $14.20 billion 1.59 $1.30 billion $5.17 17.44

Ingersoll-Rand has higher revenue and earnings than Edgen Group. Edgen Group is trading at a lower price-to-earnings ratio than Ingersoll-Rand, indicating that it is currently the more affordable of the two stocks.

Summary

Ingersoll-Rand beats Edgen Group on 11 of the 13 factors compared between the two stocks.

About Edgen Group

Edgen Group Inc. (Edgen Group) is a holding company. The Company is a distributor of specialty products to the energy sector, including highly engineered steel pipe, valves, quenched and tempered and high yield heavy plate and related components. Its segments include Energy and Infrastructure Products (E&I) and Oil Country Tubular Goods (OCTG). The Company primarily serve customers that operate in the upstream (conventional and unconventional exploration, drilling and production of oil and natural gas in both onshore and offshore environments), midstream (gathering, processing, fractionation, transportation and storage of oil and natural gas) and downstream (refining and petrochemical applications) end markets for oil and natural gas. It also serves power generation, civil construction and mining applications. In December 2012, the Company, through its subsidiary acquired HSP Group Limited (HSP).

About Ingersoll-Rand

Ingersoll-Rand Public Limited Company provides products, services and solutions to improve the quality and comfort of air in homes and buildings, transport and protect food and perishables. The Company’s business segments include Climate and Industrial. It is engaged in the design, manufacture, sale and service of a portfolio of industrial and commercial products that include brand names, such as Ingersoll-Rand, Trane, American Standard, ARO and Club Car. Its Climate segment includes Trane and American Standard Heating and Air Conditioning, which provide heating, ventilation and air conditioning systems, and commercial and residential building services, parts, support and controls. It offers energy services and building automation through Trane Building Advantage and Nexia. Its Industrial segment includes compressed air and gas systems and services, power tools, material handling systems, ARO fluid management equipment, as well as Club Car golf, utility and rough terrain vehicles.

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