Critical Review: Brady (NYSE:BRC) vs. Eastern (NASDAQ:EML)

Brady (NYSE:BRC) and Eastern (NASDAQ:EML) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, dividends and valuation.

Analyst Recommendations

This is a summary of recent recommendations for Brady and Eastern, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brady	0	0	1	1	3.50
Eastern	0	1	0	0	2.00

Dividends

Brady pays an annual dividend of $0.98 per share and has a dividend yield of 1.1%. Eastern pays an annual dividend of $0.44 per share and has a dividend yield of 2.4%. Brady pays out 23.0% of its earnings in the form of a dividend. Eastern pays out 35.5% 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. Brady has raised its dividend for 39 consecutive years.

Profitability

This table compares Brady and Eastern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brady	13.01%	18.62%	12.99%
Eastern	2.96%	7.18%	3.84%

Institutional & Insider Ownership

76.3% of Brady shares are owned by institutional investors. Comparatively, 77.0% of Eastern shares are owned by institutional investors. 15.6% of Brady shares are owned by company insiders. Comparatively, 17.0% of Eastern shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Brady has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500. Comparatively, Eastern has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Earnings and Valuation

This table compares Brady and Eastern”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brady	$1.51 billion	2.87	$189.26 million	$4.27	21.58
Eastern	$258.12 million	0.44	-$8.53 million	$1.24	15.08

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

Summary

Brady beats Eastern on 13 of the 17 factors compared between the two stocks.

About Brady

Brady Corporation manufactures and supplies identification solutions (IDS) and workplace safety (WPS) products to identify and protect premises, products, and people in the United States and internationally. The company offers materials, printing systems, RFID, and bar code scanners for product identification, brand protection labeling, work in process labeling, finished product identification, and industrial track and trace applications; safety signs, floor-marking tapes, pipe markers, labeling systems, spill control products, lockout/tagout device, and software and services for safety compliance auditing, procedure writing, and training; and hand-held printers, wire markers, sleeves, and tags for wire identification. It also provides name tags, badges, lanyards, rigid card printing systems, and access control software for people identification; and wristbands, labels, printing systems, and other products for tracking and improving the safety of patients. In addition, the company offers workplace safety, identification, and compliance products, such as safety and compliance signs, tags, labels, and markings; informational signage and markings; asset tracking labels; facility safety and personal protection equipment; first-aid products; and other compliance products for process, government, education, construction, and utilities industries. Further, it provides stock and custom identification products; and sells related resale products. The company serves industrial and electronic manufacturing, healthcare, chemical, oil, gas, automotive, aerospace, governments, mass transit, electrical contractors, education, leisure and entertainment, telecommunications, and other industries through distributors, direct sales force, and digital channels. Brady Corporation was incorporated in 1914 and is headquartered in Milwaukee, Wisconsin.

About Eastern

The Eastern Company designs, manufactures, and sells engineered solutions to industrial markets in the United States and internationally. The company offers turnkey returnable packaging solutions, which are used in the assembly processes of vehicles, aircraft, and durable goods, as well as in production processes of plastic packaging products, packaged consumer goods, and pharmaceuticals; designs and manufactures blow mold tools and injection blow mold tooling products, and 2-step stretch blow molds and related components for the stretch blow molding industry; and supplies blow molds and change parts to the food, beverage, healthcare, and chemical industries. It also provides rotary latches, compression latches, draw latches, hinges, camlocks, key switches, padlocks, and handles; and development and program management services for custom electromechanical and mechanical systems for original equipment manufacturers (OEMs) and customer applications. In addition, the company designs and manufactures proprietary vision technology for OEMs and aftermarket applications, as well as offers aftermarket components to the heavy- and medium-duty truck, motorhome, and bus markets. The Eastern Company was founded in 1858 and is based in Shelton, Connecticut.