Analyzing Wabtec (NYSE:WAB) & THK (OTCMKTS:THKLY)

Wabtec (NYSE:WAB) and THK (OTCMKTS:THKLY) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.

Insider & Institutional Ownership

91.7% of Wabtec shares are held by institutional investors. 0.6% of Wabtec shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Wabtec and THK’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wabtec	10.59%	15.10%	7.50%
THK	N/A	N/A	N/A

Volatility and Risk

Wabtec has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, THK has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Wabtec and THK, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wabtec	0	2	10	0	2.83
THK	0	1	0	0	2.00

Wabtec presently has a consensus target price of $313.55, suggesting a potential upside of 9.45%. Given Wabtec’s stronger consensus rating and higher probable upside, analysts clearly believe Wabtec is more favorable than THK.

Dividends

Wabtec pays an annual dividend of $1.24 per share and has a dividend yield of 0.4%. THK pays an annual dividend of $0.37 per share and has a dividend yield of 1.9%. Wabtec pays out 16.7% of its earnings in the form of a dividend. THK pays out 123.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Wabtec has increased its dividend for 4 consecutive years.

Valuation & Earnings

This table compares Wabtec and THK”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wabtec	$11.17 billion	4.33	$1.17 billion	$7.44	38.50
THK	$1.61 billion	2.93	-$468.27 million	$0.30	65.88

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

Summary

Wabtec beats THK on 14 of the 17 factors compared between the two stocks.

About Wabtec

Westinghouse Air Brake Technologies Corporation, together with its subsidiaries, provides technology-based locomotives, equipment, systems, and services for the freight rail and passenger transit industries worldwide. It offers diesel-electric, battery, and liquid natural gas-powered locomotives; engines, electric motors, and propulsion systems; and marine and mining products. The company also offers positive train control equipment; pneumatic braking products; railway electronics; signal design and engineering services; distributed locomotive power, train cruise controls, and train remote controls; industrial/mobile Internet of Things hardware and software, edge-to-cloud, on and off-board analytics and rules, and asset performance management solutions; rail and shipper transportation management, and port visibility and optimization solutions; and network optimization solutions. In addition, it provides freight car trucks, braking equipment, and related components; air compressors and dryers; heat transfer components and systems; track and switch products; new commuter and switcher locomotives; and turbochargers. Further, the company offers freight locomotive overhauls, modernizations, and refurbishment services; locomotive and car maintenance; transit locomotive and car overhaul; unit exchange of locomotive components; and maintenance of way equipment and services. Additionally, it provides railway and freight braking equipment and related components; friction products, such as brake shoes, discs, and pads; heating, ventilation, and air conditioning equipment; access and platform screen doors; pantographs; auxiliary power converter and battery chargers; passenger information systems and closed-circuit television; signaling and railway electric relays; and doors, window assemblies, accessibility lifts, ramps, and electric charging solutions for buses. The company was founded in 1869 and is headquartered in Pittsburgh, Pennsylvania.

About THK

THK Co., Ltd. engages in the manufacture and sale of mechanical components worldwide. The company provides linear motion (LM) guides, ball screws, ball splines, LM guide actuators, cross roller rings/ double row angular contact ring, electric actuators, linear motor actuators, cam followers, roller followers, linear bushes, LM strokes, slide packs, slide rails, cross roller guides and tables, linear ball slides, LM and flat rollers, spline nuts, screw nuts, change nuts, precision linear packs, link balls, rod ends, spherical plain bearings, lubrication accessories, and seismic isolation products. Its products are used in various applications, including machine tools, general industrial machinery, precision instruments, semiconductor and LCD manufacturing equipment, industrial robots, electronic devices, and transport systems, as well as in construction, aerospace, medical and assistive, and other manufacturing industries. The company was incorporated in 1946 and is headquartered in Tokyo, Japan.