Rockwell Automation (NYSE: ROK) and Spectrum Brands (NYSE:SPB) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Rockwell Automation and Spectrum Brands, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rockwell Automation 1 11 2 0 2.07
Spectrum Brands 0 1 10 0 2.91

Rockwell Automation currently has a consensus target price of $182.73, indicating a potential downside of 3.21%. Spectrum Brands has a consensus target price of $142.78, indicating a potential upside of 28.86%. Given Spectrum Brands’ stronger consensus rating and higher possible upside, analysts clearly believe Spectrum Brands is more favorable than Rockwell Automation.

Dividends

Rockwell Automation pays an annual dividend of $3.34 per share and has a dividend yield of 1.8%. Spectrum Brands pays an annual dividend of $1.68 per share and has a dividend yield of 1.5%. Rockwell Automation pays out 117.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Spectrum Brands pays out 33.3% of its earnings in the form of a dividend. Rockwell Automation has raised its dividend for 8 consecutive years and Spectrum Brands has raised its dividend for 4 consecutive years. Rockwell Automation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

72.8% of Rockwell Automation shares are owned by institutional investors. Comparatively, 47.7% of Spectrum Brands shares are owned by institutional investors. 1.3% of Rockwell Automation shares are owned by company insiders. Comparatively, 1.0% of Spectrum Brands shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Rockwell Automation and Spectrum Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rockwell Automation 5.85% 39.45% 12.68%
Spectrum Brands 5.91% 17.48% 4.40%

Volatility & Risk

Rockwell Automation has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, Spectrum Brands has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.

Valuation and Earnings

This table compares Rockwell Automation and Spectrum Brands’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rockwell Automation $6.31 billion 3.82 $825.70 million $2.85 66.24
Spectrum Brands $5.01 billion 1.28 $295.80 million $5.04 21.98

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

Summary

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

Rockwell Automation Company Profile

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.

Spectrum Brands Company Profile

Spectrum Brands Holdings, Inc. (SB Holdings) is a diversified global consumer products company. The Company manufactures, markets and/or distributes its products in approximately 160 countries in the North America (NA); Europe, the Middle East and Africa (EMEA); Latin America (LATAM), and Asia-Pacific (APAC) regions. It has five segments: Global Batteries & Appliances (GBA), Global Pet Supplies (PET), Home and Garden (H&G), Hardware & Home Improvement (HHI) and Global Auto Care (GAC). The Company’s GBA segment includes product categories, such as consumer batteries, small appliances and personal care. The Company’s HHI segment includes product categories, such as lockset, plumbing and hardware. The Company’s PET segment’s product categories include aquatics, companion animal and pet food. The Company’s H&G segment’s product categories include controls, household and repellents. The Company’s GAC segment’s product categories include appearance, performance and A/C recharge.

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