Tennant (NYSE:TNC) versus ATS (NYSE:ATS) Financial Analysis

ATS (NYSE:ATS) and Tennant (NYSE:TNC) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, earnings, profitability and institutional ownership.

Volatility & Risk

ATS has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, Tennant has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for ATS and Tennant, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ATS	1	2	2	0	2.20
Tennant	0	2	1	0	2.33

ATS presently has a consensus target price of $35.00, suggesting a potential upside of 23.32%. Tennant has a consensus target price of $102.00, suggesting a potential upside of 29.72%. Given Tennant’s stronger consensus rating and higher probable upside, analysts clearly believe Tennant is more favorable than ATS.

Profitability

This table compares ATS and Tennant’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ATS	-0.08%	8.82%	3.37%
Tennant	4.42%	16.55%	8.65%

Insider and Institutional Ownership

75.8% of ATS shares are owned by institutional investors. Comparatively, 93.3% of Tennant shares are owned by institutional investors. 2.6% of Tennant 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.

Valuation and Earnings

This table compares ATS and Tennant”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ATS	$1.82 billion	1.53	-$20.16 million	($0.01)	-2,838.20
Tennant	$1.29 billion	1.11	$83.70 million	$2.92	26.93

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

Summary

Tennant beats ATS on 10 of the 14 factors compared between the two stocks.

About ATS

ATS Corporation, together with its subsidiaries, provides automation solutions worldwide. The company is also involved in planning, designing, building, commissioning, and servicing automated manufacturing and assembly systems, including automation products and test solutions. In addition, it offers pre-automation services comprising discovery and analysis, concept development, simulation, and total cost of ownership modelling; post automation services, including training, process optimization, preventative maintenance, emergency and on-call support, spare parts, retooling, retrofits, and equipment relocation; and contract manufacturing services, as well as after sales and services. Further, the company provides engineering design, prototyping, process verification, specification writing, software and manufacturing process controls development, standard automation products/platforms, equipment design and build, third-party equipment qualification, procurement and integration, automation system installation, product line commissioning, validation, and documentation services. Additionally, it offers value engineering, supply chain management, and integration and manufacturing capabilities, as well as other automation products and solutions; and software and digital solutions comprising connected factory floor management systems to capture, analyze, and use real time machine performance data to troubleshoot, deliver process and product solutions, prevent equipment downtime, drive operational efficiency, and unlock performance for sustainable production improvements. ATS Corporation serves life sciences, transportation and mobility, consumer products, food and beverage, electronics, nuclear, packaging, warehousing and distribution, and energy markets. The company was formerly known as ATS Automation Tooling Systems Inc. and changed its name to ATS Corporation in November 2022. ATS Corporation was founded in 1978 and is headquartered in Cambridge, Canada.

About Tennant

Tennant Company, together with its subsidiaries, designs, manufactures, and markets floor cleaning equipment in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers a suite of products, including floor maintenance and cleaning equipment, detergent-free and other sustainable cleaning technologies, aftermarket parts and consumables, equipment maintenance and repair services, and asset management solutions. It provides business solutions, such as financing, rental, and leasing programs, as well as machine-to-machine asset management solutions. The company offers its products under the Tennant, Nobles, Alfa Uma Empresa Tennant, IPC, Gaomei, and Rongen brands, as well as private-label brands. Its products are used in retail establishments and distribution centers; factories and warehouses; and public venues, such as arenas and stadiums, office buildings, schools and universities, hospitals and clinics, and other environments. The company markets its products to contract cleaners and businesses through direct sales and service organizations, as well as through a network of authorized distributors. Tennant Company was founded in 1870 and is headquartered in Eden Prairie, Minnesota.