Reviewing WD-40 (WDFC) and Zep (ZEP)
WD-40 (NASDAQ: WDFC) and Zep (NYSE:ZEP) are both consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitabiliy, institutional ownership and dividends.
WD-40 pays an annual dividend of $1.96 per share and has a dividend yield of 1.9%. Zep does not pay a dividend. WD-40 pays out 53.0% of its earnings in the form of a dividend. Zep has increased its dividend for 4 consecutive years.
This table compares WD-40 and Zep’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and recommmendations for WD-40 and Zep, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
WD-40 currently has a consensus target price of $108.67, indicating a potential upside of 3.10%. Given WD-40’s higher possible upside, analysts plainly believe WD-40 is more favorable than Zep.
Earnings & Valuation
This table compares WD-40 and Zep’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|WD-40||$381.10 million||3.88||$80.20 million||$3.70||28.49|
WD-40 has higher revenue and earnings than Zep.
Insider and Institutional Ownership
82.1% of WD-40 shares are held by institutional investors. 3.9% of WD-40 shares are held 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.
WD-40 beats Zep on 8 of the 10 factors compared between the two stocks.
WD-40 Company is a global company engaged in developing and selling products, which solve problems in workshops, factories and homes. The Company’s segments include the Americas; Europe, Middle East and Africa (EMEA), and Asia-Pacific. The Company’s Americas segment includes the United States, Canada and Latin America. The EMEA segment includes countries in Europe, the Middle East, Africa and India. The Asia-Pacific segment includes Australia, China and other countries in the Asia region. The Company has two product groups, which include maintenance products and homecare and cleaning products. As of August 31, 2016, the Company marketed and sold its products in more than 176 countries and territories around the world primarily through mass retail and home center stores, warehouse club stores, grocery stores, hardware stores, automotive parts outlets, sport retailers, independent bike dealers, online retailers and industrial distributors and suppliers.
Zep Inc. is a consumable chemical packaged goods company, providing a variety of chemicals and related products and services that help professionals maintain, clean and protect their assets. The Company markets its products and services under brand names, including Zep, Zep Professional, Zep Commercial, Zep Automotive and other Zep Inc. brands. Its product portfolio, which is produced using more than 4,000 formulations, includes anti-bacterial and industrial hand care products, cleaners, degreasers, deodorizers, disinfectants, floor finishes, sanitizers, pest- and weed-control products, air-care products and delivery systems and a variety of automotive maintenance chemicals. The Company manufactures its products at nine facilities located in the United States, Canada, the Netherlands, Italy, and United Kingdom.
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