Valmont Industries (NYSE:VMI) & Fanuc (OTCMKTS:FANUY) Critical Analysis

Valmont Industries (NYSE:VMI) and Fanuc (OTCMKTS:FANUY) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Insider and Institutional Ownership

87.8% of Valmont Industries shares are held by institutional investors. Comparatively, 1.5% of Fanuc shares are held by institutional investors. 1.4% of Valmont Industries shares are held by company 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.

Profitability

This table compares Valmont Industries and Fanuc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valmont Industries	11.70%	25.57%	12.44%
Fanuc	20.11%	9.60%	8.65%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Valmont Industries and Fanuc, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valmont Industries	0	2	4	0	2.67
Fanuc	0	2	0	1	2.67

Valmont Industries presently has a consensus price target of $587.00, suggesting a potential upside of 23.55%. Given Valmont Industries’ higher possible upside, equities research analysts clearly believe Valmont Industries is more favorable than Fanuc.

Valuation & Earnings

This table compares Valmont Industries and Fanuc”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valmont Industries	$4.10 billion	2.24	$334.78 million	$25.68	18.50
Fanuc	$5.70 billion	6.43	$1.10 billion	$0.62	30.10

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

Dividends

Valmont Industries pays an annual dividend of $3.08 per share and has a dividend yield of 0.6%. Fanuc pays an annual dividend of $0.21 per share and has a dividend yield of 1.1%. Valmont Industries pays out 12.0% of its earnings in the form of a dividend. Fanuc pays out 33.9% 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. Valmont Industries has increased its dividend for 1 consecutive years.

Risk and Volatility

Valmont Industries has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Fanuc has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.

Summary

Valmont Industries beats Fanuc on 10 of the 17 factors compared between the two stocks.

About Valmont Industries

Valmont Industries, Inc. operates as manufacturer of products and services for infrastructure and agriculture markets in the United States, Australia, Brazil, and internationally. It operates through two segments, Infrastructure and Agriculture. The company manufactures and distributes steel, pre-stressed concrete, composite structures for electrical transmission, substation, and distribution applications; and designs, engineers, and manufactures metal, steel, wood, aluminum, and composite poles and structures for lighting and transportation applications. It also offers galvanizing, anodizing, painting, and powder coating services for paint products; towers, small cell structures, camouflage concealment solutions, passive intermodulation mitigation equipment, and components for wireless communication markets; and solar single-axis tracker product, an integrated system of steel structures, electric motors, and electronic controllers, as well as provides coatings services to preserve metal products. In addition, the company manufactures center pivot components and linear irrigation equipment for the agricultural markets, such as parts and tubular products for industrial customers; advanced technology solutions for agricultural sector; mechanical irrigation equipment and service parts under the Valley brand name. It serves municipalities and government entities, commercial lighting fixtures manufacturing companies, contractors, telecommunications and utility companies, and farmers, as well as the general manufacturing sector. Valmont Industries, Inc. was founded in 1946 and is headquartered in Omaha, Nebraska.

About Fanuc

FANUC Corporation provides factory automation products in Japan, the Americas, Europe, China, the rest of Asia, and internationally. The company offers CNC series products, servo motors, lasers, robots, compact machining centers, electric injection molding machines, wire electrical discharge machines, and ultra-precision machines. It also provides FANUC intelligent edge link and drive system, an open platform for the manufacturing industry. FANUC Corporation was incorporated in 1950 and is headquartered in Yamanashi, Japan.