ESAB (NYSE:ESAB) and Snap-On (NYSE:SNA) Head to Head Analysis

ESAB (NYSE:ESAB) and Snap-On (NYSE:SNA) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Institutional and Insider Ownership

91.1% of ESAB shares are held by institutional investors. Comparatively, 84.9% of Snap-On shares are held by institutional investors. 7.2% of ESAB shares are held by insiders. Comparatively, 3.8% of Snap-On shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

ESAB pays an annual dividend of $0.48 per share and has a dividend yield of 0.7%. Snap-On pays an annual dividend of $9.76 per share and has a dividend yield of 2.6%. ESAB pays out 17.2% of its earnings in the form of a dividend. Snap-On pays out 49.8% 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. ESAB has increased its dividend for 3 consecutive years and Snap-On has increased its dividend for 15 consecutive years. Snap-On is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

ESAB has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, Snap-On has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Earnings & Valuation

This table compares ESAB and Snap-On”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ESAB	$3.00 billion	1.34	$226.77 million	$2.79	23.26
Snap-On	$5.27 billion	3.65	$1.02 billion	$19.61	18.98

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

Profitability

This table compares ESAB and Snap-On’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ESAB	5.75%	14.48%	5.99%
Snap-On	21.25%	17.07%	12.00%

Analyst Recommendations

This is a breakdown of current ratings and price targets for ESAB and Snap-On, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ESAB	0	1	7	0	2.88
Snap-On	0	1	5	0	2.83

ESAB currently has a consensus price target of $135.57, indicating a potential upside of 108.92%. Snap-On has a consensus price target of $426.20, indicating a potential upside of 14.52%. Given ESAB’s stronger consensus rating and higher possible upside, equities research analysts plainly believe ESAB is more favorable than Snap-On.

Summary

Snap-On beats ESAB on 9 of the 17 factors compared between the two stocks.

About ESAB

ESAB Corporation engages in the formulation, development, manufacture, and supply of consumable products and equipment for use in cutting, joining, automated welding, and gas control equipment. Its comprehensive range of welding consumables includes electrodes, cored and solid wires, and fluxes using a range of specialty and other materials; and cutting consumables comprising electrodes, nozzles, shields, and tips. The company's equipment ranges from portable welding machines to large customized automated cutting and welding systems. It also offers a range of software and digital solutions to help its customers increase their productivity, remotely monitor their welding operations, and digitize their documentation. The company sells its products under the ESAB brand to various end markets, such as general industry, infrastructure, renewable energy, medical and life sciences, transportation, construction, and energy. It offers its products through independent distributors and direct salespeople. The company operates in North America, South America, Europe, the Middle East, India, Africa, and the Asia Pacific. ESAB Corporation was founded in 1904 and is headquartered in North Bethesda, Maryland.

About Snap-On

Snap-on Incorporated manufactures and markets tools, equipment, diagnostics, and repair information and systems solutions for professional users worldwide. It operates through Commercial & Industrial Group, Snap-on Tools Group, Repair Systems & Information Group, and Financial Services segments. The company provides hand tools, including wrenches, sockets, ratchet wrenches, pliers, screwdrivers, punches and chisels, saws and cutting tools, pruning tools, torque measuring instruments, and other related products; power tools, such as cordless, pneumatic, and hydraulic and corded tools; and tool storage products comprising tool chests, roll cabinets, and other products. It provides handheld and computer-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer purchasing facilitation services, and warranty management systems and analytics; and engineered solutions. In addition, the company offers solutions for the service of vehicles and industrial equipment that include wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane equipment, collision repair equipment, vehicle air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers, and hoists, as well as after-sales support services and training programs. Further, it provides financing programs to facilitate the sales of its products and support its franchise business. It serves the aviation and aerospace, agriculture, infrastructure construction, government and military, mining, natural resources, power generation, and technical education industries. Snap-on Incorporated was incorporated in 1920 and is headquartered in Kenosha, Wisconsin.