Franklin Electric (NASDAQ: FELE) and Regal Beloit (NYSE:RBC) are both industrial products companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.
Insider & Institutional Ownership
77.9% 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, 2.2% of Regal Beloit shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This table compares Franklin Electric and Regal Beloit’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
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 1.5%. 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 increased its dividend for 8 consecutive years and Regal Beloit has increased its dividend for 8 consecutive years. Regal Beloit is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of current ratings for Franklin Electric and Regal Beloit, as reported by MarketBeat.
||Strong Buy Ratings
Franklin Electric currently has a consensus price target of $47.33, suggesting a potential upside of 15.31%. Regal Beloit has a consensus price target of $86.18, suggesting a potential upside of 20.37%. Given Regal Beloit’s stronger consensus rating and higher possible upside, analysts clearly believe Regal Beloit is more favorable than Franklin Electric.
Earnings & Valuation
This table compares Franklin Electric and Regal Beloit’s gross revenue, earnings per share and valuation.
||Earnings Per Share
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.
Risk & Volatility
Franklin Electric has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500. Comparatively, Regal Beloit has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.
Regal Beloit beats Franklin Electric on 9 of the 16 factors compared between the two stocks.
Franklin Electric Company Profile
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.
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.
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