Illinois Tool Works (ITW) versus HC2 (HCHC) Critical Analysis
Illinois Tool Works (NYSE: ITW) and HC2 (NYSE:HCHC) are both industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.
This is a breakdown of current recommendations for Illinois Tool Works and HC2, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Illinois Tool Works||0||9||7||0||2.44|
Illinois Tool Works presently has a consensus price target of $164.80, indicating a potential downside of 0.74%. HC2 has a consensus price target of $11.50, indicating a potential upside of 86.08%. Given HC2’s stronger consensus rating and higher possible upside, analysts clearly believe HC2 is more favorable than Illinois Tool Works.
Volatility and Risk
Illinois Tool Works has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, HC2 has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.
Illinois Tool Works pays an annual dividend of $3.12 per share and has a dividend yield of 1.9%. HC2 does not pay a dividend. Illinois Tool Works pays out 47.8% of its earnings in the form of a dividend. HC2 has increased its dividend for 53 consecutive years.
Insider & Institutional Ownership
74.7% of Illinois Tool Works shares are owned by institutional investors. Comparatively, 59.9% of HC2 shares are owned by institutional investors. 0.9% of Illinois Tool Works shares are owned by insiders. Comparatively, 16.0% of HC2 shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Illinois Tool Works and HC2’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Illinois Tool Works||$13.60 billion||4.18||$2.04 billion||$6.53||25.43|
|HC2||$1.56 billion||0.17||-$94.54 million||($2.58)||-2.40|
Illinois Tool Works has higher revenue and earnings than HC2. HC2 is trading at a lower price-to-earnings ratio than Illinois Tool Works, indicating that it is currently the more affordable of the two stocks.
This table compares Illinois Tool Works and HC2’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Illinois Tool Works||16.12%||47.21%||13.91%|
Illinois Tool Works beats HC2 on 11 of the 16 factors compared between the two stocks.
Illinois Tool Works Company Profile
Illinois Tool Works Inc. is a manufacturer of industrial products and equipment. The Company operates through seven segments. The Automotive OEM segment produces components and fasteners for automotive-related applications. The Food Equipment segment offers commercial food equipment. The Test & Measurement and Electronics segment produces test and measurement, and electronic manufacturing and maintenance, repair and operations (MRO) solutions. The Welding segment produces welding equipment, consumables and accessories for industrial and commercial applications. The Polymers & Fluids segment produces adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. The Construction Products segment supplies engineered fastening systems and solutions. The Specialty Products segment produces beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners.
HC2 Company Profile
HC2 Holdings, Inc. engages in construction, marine services, insurance, telecommunications, energy, life sciences, and other businesses in the United States, the United Kingdom, and internationally. The company fabricates and erects structural steel for commercial and industrial construction projects, such as buildings and office complexes, hotels and casinos, convention centers, sports arenas and stadiums, shopping malls, hospitals, dams, bridges, mines, and power plants. It also fabricates trusses and girders; and fabricates and erects water pipes, water storage tanks, pollution control scrubbers, tunnel liners, pressure vessels, strainers, filters, separators, and various customized products. In addition, the company provides subsea cable installation and maintenance services for the telecommunications sector; installation, maintenance, and repair services for fiber optic communication and power infrastructure to offshore platforms; and installation services for power cables for use in offshore wind farms and in the offshore wind market. Further, it distributes natural gas motor fuels; designs, builds, owns, acquires, operates, and maintains compressed natural gas fueling stations for transportation vehicles; and offers voice communication services for national telecommunications, mobile, prepaid, and voice over Internet protocol service operators, as well as wholesale carriers and Internet service providers. Additionally, the company provides long-term care, life, and annuity insurance products to individuals. Furthermore, it focuses on developing products to treat early osteoarthritis of the knee; develops skin lightening technology; owns licenses to create and distribute NASCAR video games; and offers analytics on broadcast TV, digital, and social media online platforms. The company was formerly known as PTGi Holding Inc. and changed its name to HC2 Holdings, Inc. in April 2014. HC2 Holdings, Inc. was founded in 1994 and is headquartered in New York, New York.
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