Ferguson (NYSE:FERG) and Ingersoll Rand (NYSE:IR) Financial Review

Ferguson (NYSE:FERG) and Ingersoll Rand (NYSE:IR) are both large-cap industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a summary of current ratings and price targets for Ferguson and Ingersoll Rand, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferguson	0	7	12	2	2.76
Ingersoll Rand	0	7	4	0	2.36

Ferguson currently has a consensus price target of $250.47, indicating a potential upside of 10.25%. Ingersoll Rand has a consensus price target of $91.44, indicating a potential upside of 12.32%. Given Ingersoll Rand’s higher possible upside, analysts clearly believe Ingersoll Rand is more favorable than Ferguson.

Earnings and Valuation

This table compares Ferguson and Ingersoll Rand”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferguson	$30.76 billion	1.44	$700.00 million	$9.90	22.95
Ingersoll Rand	$7.46 billion	4.31	$838.60 million	$1.35	60.31

Ingersoll Rand has lower revenue, but higher earnings than Ferguson. Ferguson is trading at a lower price-to-earnings ratio than Ingersoll Rand, indicating that it is currently the more affordable of the two stocks.

Dividends

Ferguson pays an annual dividend of $3.32 per share and has a dividend yield of 1.5%. Ingersoll Rand pays an annual dividend of $0.08 per share and has a dividend yield of 0.1%. Ferguson pays out 33.5% of its earnings in the form of a dividend. Ingersoll Rand pays out 5.9% 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.

Volatility & Risk

Ferguson has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Ingersoll Rand has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500.

Insider and Institutional Ownership

82.0% of Ferguson shares are held by institutional investors. Comparatively, 95.3% of Ingersoll Rand shares are held by institutional investors. 0.2% of Ferguson shares are held by company insiders. Comparatively, 0.7% of Ingersoll Rand shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Ferguson and Ingersoll Rand’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ferguson	6.28%	36.42%	11.91%
Ingersoll Rand	7.31%	12.14%	6.88%

Summary

Ingersoll Rand beats Ferguson on 9 of the 17 factors compared between the two stocks.

About Ferguson

Ferguson Enterprises Inc. distributes plumbing and heating products in North America. The company provides expertise, solutions, and products, including infrastructure, plumbing, appliances, fire, and fabrication, as well as heating, ventilation, and air conditioning (HVAC) to residential and non-residential customers. It also supplies specialist water and wastewater treatment products to residential, commercial, and infrastructure contractors, as well as supplies pipe, valves, and fittings solutions to industrial customers. In addition, it offers customized solutions, such as virtual design, fabrication, valve actuation, pre-assembly, kitting, installation, and project management services, as well as after-sales support that comprises warranty, credit, project-based billing, returns and maintenance, and repair and operations support. The company sells its products through a network of distribution centers, branches, counter service and specialist sales associates, showroom consultants, and e-commerce channels. Ferguson Enterprises Inc. was founded in 1953 and is headquartered in Newport News, Virginia.

About Ingersoll Rand

Ingersoll Rand Inc. provides various mission-critical air, gas, liquid, and solid flow creation technologies services and solutions worldwide. It operates through two segments, Industrial Technologies and Services, and Precision and Science Technologies. The Industrial Technologies and Services segment designs, manufactures, markets, and services air and gas compression, vacuum, and blower products; fluid transfer equipment and loading systems; and power tools and lifting equipment, including associated aftermarket parts, consumables, air treatment equipment, controls, other accessories, and services under the under the Ingersoll Rand, Gardner Denver, Nash, CompAir, Elmo Rietschle brands, etc. The Precision and Science Technologies segment designs, manufactures, and markets diaphragm, piston, water-powered, peristaltic, gear, vane, progressive cavity, and syringe pumps; and gas boosters, hydrogen compression systems, automated liquid handling systems, odorant injection systems, controls, software, and other related components and accessories for liquid and gas dosing, transfer, dispensing, compression, sampling, pressure management, and flow control in specialized or critical applications under the Air Dimensions, Albin, ARO, Dosatron, Haskel, Ingersoll Rand, LMI, Maximus, Milton Roy, MP, Oberdorfer, Seepex, Thomas, Welch, Williams, YZ, and Zinnser Analytic brand names. This segment's products are used in medical, life sciences, industrial manufacturing, water and wastewater, chemical processing, energy, food and beverage, agriculture, and other markets. It sells through an integrated network of direct sales representatives and independent distributors. The company was formerly known as Gardner Denver Holdings, Inc. and changed its name to Ingersoll Rand Inc. in March 2020. Ingersoll Rand Inc. was founded in 1859 and is headquartered in Davidson, North Carolina.