Ferguson (NYSE:FERG) and Burnham (OTCMKTS:BURCA) Head-To-Head Analysis

Ferguson (NYSE:FERG) and Burnham (OTCMKTS:BURCA) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Institutional & Insider Ownership

82.0% of Ferguson shares are owned by institutional investors. Comparatively, 1.5% of Burnham shares are owned by institutional investors. 0.2% of Ferguson shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Ferguson has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Burnham has a beta of 0.18, meaning that its stock price is 82% less volatile than the S&P 500.

Dividends

Ferguson pays an annual dividend of $3.56 per share and has a dividend yield of 1.3%. Burnham pays an annual dividend of $0.92 per share and has a dividend yield of 3.4%. Ferguson pays out 36.0% of its earnings in the form of a dividend. Burnham pays out -20.1% 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. Burnham is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and price targets for Ferguson and Burnham, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferguson	0	6	11	2	2.79
Burnham	0	0	0	0	0.00

Ferguson presently has a consensus price target of $262.62, suggesting a potential downside of 0.93%. Given Ferguson’s stronger consensus rating and higher possible upside, analysts clearly believe Ferguson is more favorable than Burnham.

Valuation and Earnings

This table compares Ferguson and Burnham”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferguson	$31.16 billion	1.66	$1.86 billion	$9.90	26.78
Burnham	$258.11 million	0.36	-$21.45 million	($4.58)	-5.89

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

Profitability

This table compares Ferguson and Burnham’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ferguson	6.28%	35.73%	11.82%
Burnham	-8.03%	11.23%	7.11%

Summary

Ferguson beats Burnham on 15 of the 17 factors compared between the two stocks.

About Ferguson

Ferguson Enterprises Inc. distributes plumbing and heating products in North America. The company provides expertise, solutions, and products, including infrastructure, plumbing, appliances, fire, and fabrication, as well as heating, ventilation, and air conditioning (HVAC) to residential and non-residential customers. It also supplies specialist water and wastewater treatment products to residential, commercial, and infrastructure contractors, as well as supplies pipe, valves, and fittings solutions to industrial customers. In addition, it offers customized solutions, such as virtual design, fabrication, valve actuation, pre-assembly, kitting, installation, and project management services, as well as after-sales support that comprises warranty, credit, project-based billing, returns and maintenance, and repair and operations support. The company sells its products through a network of distribution centers, branches, counter service and specialist sales associates, showroom consultants, and e-commerce channels. Ferguson Enterprises Inc. was founded in 1953 and is headquartered in Newport News, Virginia.

About Burnham

Burnham Holdings, Inc. designs, manufactures, and sells boilers and related heating, ventilation, and air conditioning products and accessories for residential, commercial, and industrial applications in the United States and internationally. Its residential hydronic heating products include cast iron, stainless steel, and steel boilers; cast iron and steel heat distribution products; radiators; and warm air furnaces and central air conditioning systems for the residential heating and cooling markets, including units for the manufactured housing industry. The company's commercial and industrial heating products comprise a range of cast iron, stainless steel, fire tube, water tube, copper tube boilers, and water heaters; and boiler room accessories that are used for various applications, such as military bases, multi-unit residential buildings, health care, government, education, and hospital facilities. The company sells its residential products through wholesale distributors to builders, heating contractors, fuel dealers, and utilities for resale to end-use customers; and commercial products primarily through independent sales representatives, directly to contractors, or end users. Burnham Holdings, Inc. is based in Lancaster, Pennsylvania.