Head to Head Survey: Regal Beloit (RBC) versus Nidec (NJDCY)

Regal Beloit (NYSE: RBC) and Nidec (OTCMKTS:NJDCY) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, dividends, risk, profitability and institutional ownership.

Institutional and Insider Ownership

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96.7% of Regal Beloit shares are owned by institutional investors. Comparatively, 0.1% of Nidec shares are owned by institutional investors. 2.2% of Regal Beloit shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Regal Beloit pays an annual dividend of $1.04 per share and has a dividend yield of 1.5%. Nidec pays an annual dividend of $0.09 per share and has a dividend yield of 0.2%. Regal Beloit pays out 21.4% of its earnings in the form of a dividend. Nidec pays out 10.3% 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. Regal Beloit has raised its dividend for 8 consecutive years. Regal Beloit is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Regal Beloit and Nidec’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Regal Beloit 6.34% 9.64% 4.92%
Nidec 8.69% 13.81% 7.11%

Valuation and Earnings

This table compares Regal Beloit and Nidec’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Regal Beloit $3.36 billion 0.94 $213.00 million $4.87 14.70
Nidec $11.09 billion 3.99 $1.04 billion $0.87 42.99

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

Volatility and Risk

Regal Beloit has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500. Comparatively, Nidec has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Regal Beloit and Nidec, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Regal Beloit 0 6 7 0 2.54
Nidec 0 1 1 0 2.50

Regal Beloit currently has a consensus price target of $86.18, suggesting a potential upside of 20.37%. Nidec has a consensus price target of $16.00, suggesting a potential downside of 57.22%. Given Regal Beloit’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Regal Beloit is more favorable than Nidec.

Summary

Regal Beloit beats Nidec on 9 of the 17 factors compared between the two stocks.

Regal Beloit Company Profile

Regal Beloit Corporation, together with its subsidiaries, designs, manufactures, and sells electric motors, electrical motion controls, and power generation and power transmission products worldwide. It operates through three segments: Commercial and Industrial Systems, Climate Solutions, and Power Transmission Solutions. The Commercial and Industrial Systems segment provides AC and DC motors, and controls; motors, electronic variable speed controls, and blowers; and starters, contactors, relays, variable frequency drives, and integrated solutions of components. This segment also offers precision stator and rotor kits; hazardous duty motors; and electric generators, automatic transfer switches, power generation and distribution switch gears, and components and system controls. It serves commercial heating, ventilation, and air conditioning (HVAC); pool and spa; standby and critical power; and oil and gas system markets. The Climate Solutions segment offers motors, electronic variable speed controls, and blowers, as well as capacitors, precision stators, and rotor sets for residential and light commercial HVAC, water heaters, and commercial refrigeration markets. The Power Transmission Solutions segment provides mounted and unmounted bearings; conveyor products; disc products, patented diaphragms, gear couplings, couplings and transmission elements, gears, grids, jaws, elastomers, and joints; mechanical power transmission drives, components, and bearings; and worm gearing, shaft mount reducer, helical concentric and right angle, bevel and miter gearing, center pivot gearing, and open gearing products. It serves beverage, bulk handling, metals, special machinery, energy, and aerospace and general industrial markets. The company sells its products directly, as well as through independent sales representatives and distributors. Regal Beloit Corporation was founded in 1955 and is based in Beloit, Wisconsin.

Nidec Company Profile

Nidec Corporation manufactures and sells motors and other electronic products worldwide. It offers brushless DC, brush DC, induction, SR, synchronous, servo, and stepping motors, as well as drive circuits; fans and blowers, such as DC axial flow, DC blower, and AC axial flow fans; and machinery, including inspection and measuring systems, automation units, control equipment, marking devices, and optical devices. The company also provides electronic and optical components comprising mechanical system components, optical system units, sensors, and electronic system components; automotive components; hard disk drive components; and other products that include music boxes and pottery craftwork equipment. In addition, it offers hotel services and sells private label products. The company's products have applications in the IT equipment, home appliances, audio and visual equipment, office equipment, healthcare and medical care, industrial equipment, and vehicle/robot industries. Nidec Corporation was founded in 1973 and is headquartered in Kyoto, Japan.

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