Head-To-Head Contrast: Franklin Electric (FELE) vs. Regal Beloit (RBC)

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

Risk & Volatility

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Franklin Electric has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500. Comparatively, Regal Beloit has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Earnings and Valuation

This table compares Franklin Electric and Regal Beloit’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Franklin Electric $1.12 billion 1.71 $78.18 million $1.92 21.51
Regal Beloit $3.36 billion 0.95 $213.00 million $4.87 14.75

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

Analyst Ratings

This is a breakdown of recent recommendations for Franklin Electric and Regal Beloit, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Franklin Electric 0 3 1 0 2.25
Regal Beloit 0 6 7 0 2.54

Franklin Electric currently has a consensus target price of $47.33, indicating a potential upside of 14.61%. Regal Beloit has a consensus target price of $86.18, indicating a potential upside of 19.95%. Given Regal Beloit’s stronger consensus rating and higher probable upside, analysts clearly believe Regal Beloit is more favorable than Franklin Electric.

Dividends

Franklin Electric pays an annual dividend of $0.43 per share and has a dividend yield of 1.0%. Regal Beloit pays an annual dividend of $1.04 per share and has a dividend yield of 1.4%. Franklin Electric pays out 22.4% of its earnings in the form of a dividend. Regal Beloit pays out 21.4% 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. Franklin Electric has raised its dividend for 8 consecutive years and Regal Beloit has raised its dividend for 8 consecutive years. Regal Beloit is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

78.0% of Franklin Electric shares are owned by institutional investors. Comparatively, 96.7% of Regal Beloit shares are owned by institutional investors. 2.5% of Franklin Electric shares are owned by company insiders. Comparatively, 2.3% of Regal Beloit shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Franklin Electric 6.95% 12.97% 7.65%
Regal Beloit 6.34% 9.64% 4.92%

Summary

Regal Beloit beats Franklin Electric on 9 of the 16 factors compared between the two stocks.

About Franklin Electric

Franklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. It operates in three segments: Water Systems, Fueling Systems, and Distribution. The Water Systems segment offers submersible motors, pumps, drives, electronic controls, monitoring devices, and related parts and equipment. Its motors and pumps are used principally for pumping clean water and wastewater in various residential, agricultural, and industrial applications; and electronic drives and controls are used in motors for controlling functionality, as well as providing protection from various hazards, such as electric surges, over-heating, and dry wells and tanks. The Fueling Systems segment provides pumps, pipes, sumps, fittings, vapor recovery components, electronic controls, monitoring devices, and related parts and equipment primarily for use in submersible fueling system applications. Its fuel pumping systems are used principally in total system solutions for underground gasoline, diesel, and biofuel systems. This segment serves other energy markets, such as power reliability systems, as well as includes intelligent electronic devices for online monitoring of the power utility, hydroelectric, and industrial markets. The Distribution segment sells to and provides pre-sale support and specifications to the installing contractors. It sells products produced by the Water Systems segment and other brands. The company sells its products to specialty distributors, original equipment manufacturers, industrial and petroleum equipment distributors, and oil and utility companies through its employee sales force and independent manufacturing representatives. Franklin Electric Co., Inc. was founded in 1944 and is headquartered in Fort Wayne, Indiana.

About Regal Beloit

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.

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