Orbotech (NASDAQ: ORBK) and Rockwell Automation (NYSE:ROK) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.

Earnings & Valuation

This table compares Orbotech and Rockwell Automation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Orbotech $818.31 million 2.17 $158.40 million $1.86 19.97
Rockwell Automation $6.18 billion 3.36 $1.22 billion $6.20 26.07

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

Profitability

This table compares Orbotech and Rockwell Automation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orbotech 11.03% 14.98% 10.33%
Rockwell Automation 13.04% 40.71% 12.03%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Orbotech and Rockwell Automation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orbotech 0 1 5 0 2.83
Rockwell Automation 1 11 2 0 2.07

Orbotech presently has a consensus target price of $38.83, suggesting a potential upside of 4.53%. Rockwell Automation has a consensus target price of $148.31, suggesting a potential downside of 8.26%. Given Orbotech’s stronger consensus rating and higher possible upside, equities analysts clearly believe Orbotech is more favorable than Rockwell Automation.

Volatility and Risk

Orbotech has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Rockwell Automation has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.

Insider and Institutional Ownership

70.7% of Orbotech shares are held by institutional investors. Comparatively, 73.4% of Rockwell Automation shares are held by institutional investors. 10.4% of Orbotech shares are held by insiders. Comparatively, 1.7% of Rockwell Automation shares are held by 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.

Dividends

Rockwell Automation pays an annual dividend of $3.04 per share and has a dividend yield of 1.9%. Orbotech does not pay a dividend. Rockwell Automation pays out 49.0% of its earnings in the form of a dividend. Orbotech has increased its dividend for 7 consecutive years.

Summary

Rockwell Automation beats Orbotech on 11 of the 17 factors compared between the two stocks.

About Orbotech

Orbotech Ltd. is a supplier of yield-enhancing and process-enabling solutions for the manufacture of electronics products. The Company provides cutting-edge solutions for use in the manufacture of printed circuit boards (PCBs), flat panel displays (FPDs) and semiconductor devices (SDs). The Company’s segments include Production Solutions for the Electronics Industry, Solar Energy and Recognition Software. The Production Solutions for the Electronics Industry segment is engaged in the design, development, manufacture, marketing and service of yield-enhancing and process-enabling solutions for the manufacture of electronics products. The Solar Energy segment is engaged in the design, development, manufacture and marketing of solar photovoltaic energy systems that produce electricity directly from sunlight. The Recognition Software segment is engaged in the development and marketing of check processing and healthcare payment automation solutions.

About Rockwell Automation

Rockwell Automation, Inc. (Rockwell Automation) is a provider of industrial automation power, control and information solutions for manufacturers. The Company operates through two segments: Architecture & Software and Control Products & Solutions. The Architecture & Software segment contains various hardware, software and communication components of the Company’s integrated control and information architecture capable of controlling the customer’s industrial processes and connecting with their manufacturing enterprise. Architecture & Software has a portfolio of products, including Control platforms that perform multiple control disciplines and monitoring of applications, including discrete, batch and continuous process, drives control, motion control and machine safety control. The Control Products & Solutions segment portfolio includes low and medium voltage electro-mechanical and electronic motor starters, signaling devices, termination and protection devices, relays and timers.

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