Brady (NYSE: BRC) and Sandvik (OTCMKTS:SDVKY) are both industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, risk, profitability and valuation.
Risk and Volatility
Brady has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, Sandvik has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500.
Brady pays an annual dividend of $0.83 per share and has a dividend yield of 2.2%. Sandvik pays an annual dividend of $0.25 per share and has a dividend yield of 1.3%. Brady pays out 47.4% of its earnings in the form of a dividend. Sandvik pays out 26.6% 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. Brady has increased its dividend for 32 consecutive years. Brady is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of current recommendations and price targets for Brady and Sandvik, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Brady currently has a consensus target price of $39.00, indicating a potential upside of 5.12%. Given Brady’s higher possible upside, equities research analysts clearly believe Brady is more favorable than Sandvik.
This table compares Brady and Sandvik’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
79.2% of Brady shares are owned by institutional investors. Comparatively, 0.2% of Sandvik shares are owned by institutional investors. 15.6% of Brady shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Brady and Sandvik’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Brady||$1.11 billion||1.73||$95.64 million||$1.75||21.20|
|Sandvik||$10.66 billion||2.20||$1.55 billion||$0.94||19.88|
Sandvik has higher revenue and earnings than Brady. Sandvik is trading at a lower price-to-earnings ratio than Brady, indicating that it is currently the more affordable of the two stocks.
Brady beats Sandvik on 9 of the 16 factors compared between the two stocks.
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.
Sandvik AB (publ) operates as an engineering company in the areas of rock excavation, metal-cutting, and materials technology worldwide. The company offers construction equipment and tools, including breakers and demolition tools, mobile and stationary crushers and screens, rock tools, spare and wear parts, surface drill rigs, and tunneling equipment. It also provides diffusion furnaces, and furnace products and heating materials; cemented carbide components, and diamond and cubic boron nitride in mesh and polycrystalline forms; processing systems and steel belts; and metal cutting tools and tooling systems, such as boring, drilling, milling, reaming, and turning tools, as well as tailor made tools and inserts, and tooling systems. In addition, the company offers stainless steels, special alloys, and titanium products comprising bar and hollow bars, controlled expansion hollow products, billets and blooms, hot isostatic pressed products, metal powders, plates and sheets, strip steels, and welding and wire products, as well as tubes, pipes, fittings, and flanges. It serves aerospace, automotive, construction, consumer goods, general engineering, nuclear power generation, oil and gas, process, and renewable energy industries. Sandvik AB (publ) was founded in 1862 and is headquartered in Stockholm, Sweden.
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