Financial Analysis: Brady (BRC) versus Cardtronics (CATM)

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

Institutional & Insider Ownership

76.9% of Brady shares are held by institutional investors. 15.6% of Brady shares are held by company insiders. Comparatively, 1.2% of Cardtronics shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Brady 8.81% 13.90% 9.14%
Cardtronics -9.37% 29.32% 7.19%

Dividends

Brady pays an annual dividend of $0.83 per share and has a dividend yield of 2.1%. Cardtronics does not pay a dividend. Brady pays out 44.1% of its earnings in the form of a dividend. Brady has increased its dividend for 31 consecutive years.

Volatility & Risk

Brady has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Cardtronics has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Brady and Cardtronics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brady 1 2 1 0 2.00
Cardtronics 0 3 1 0 2.25

Brady presently has a consensus target price of $38.75, indicating a potential upside of 0.13%. Cardtronics has a consensus target price of $32.00, indicating a potential upside of 81.92%. Given Cardtronics’ stronger consensus rating and higher probable upside, analysts clearly believe Cardtronics is more favorable than Brady.

Earnings and Valuation

This table compares Brady and Cardtronics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brady $1.11 billion 1.79 $95.64 million $1.88 20.59
Cardtronics $1.27 billion 0.64 $87.99 million ($2.99) -5.88

Brady has higher earnings, but lower revenue than Cardtronics. Cardtronics 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 Cardtronics on 11 of the 16 factors compared between the two stocks.

About Brady

Brady Corporation is a manufacturer and supplier of identification solutions and workplace safety products that identify and protect premises, products and people. The Company has two segments: Identification Solutions (IDS) and Workplace Safety (WPS). The IDS segment includes identification and healthcare products, and the WPS segment includes workplace safety and compliance products. The IDS segment offers products that are manufactured under various brands, including the Brady brand, and are primarily sold through distribution to a range of maintenance, repair and operations (MRO) and original equipment manufacturing (OEM) customers, and through other channels. The WPS segment offers a range of product categories, such as safety and compliance signs, tags, and labels; informational and architectural signage; industrial warehouse and office equipment, and labor law compliance posters. Its brands include Electromark, Identicard, PromoVision, Scafftag, Seton and Emedco.

About Cardtronics

Cardtronics plc, formerly Cardtronics, Inc., provides automated consumer financial services through its network of automated teller machines (ATMS) and multi-function financial services kiosks. The Company’s operations consists of its North America, Europe, and Corporate & Other segments. Its ATM operations in the United States, Canada, Mexico and Puerto Rico are included in its North America segment. Its ATM operations in the United Kingdom, Ireland, Germany, Poland, Spain and i-design are included in its Europe segment. Its transaction processing operations, which service its North American and European operations, along with external customers, and the Company’s corporate general and administrative functions comprise the Corporate & Other segment. As of December 31, 2016, it provided services to approximately 203,000 ATMs throughout the United States (including the United States territory of Puerto Rico), the United Kingdom, Ireland, Germany, Poland, Spain, Canada and Mexico.

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