Regal Beloit (NYSE: RBC) and Anixter International (NYSE:AXE) are both mid-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Profitability

This table compares Regal Beloit and Anixter International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Regal Beloit 6.28% 9.76% 4.84%
Anixter International 1.86% 12.52% 4.14%

Volatility & Risk

Regal Beloit has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500. Comparatively, Anixter International has a beta of 2.03, suggesting that its stock price is 103% more volatile than the S&P 500.

Institutional & Insider Ownership

93.8% of Regal Beloit shares are owned by institutional investors. Comparatively, 87.9% of Anixter International shares are owned by institutional investors. 2.2% of Regal Beloit shares are owned by insiders. Comparatively, 14.7% of Anixter International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Regal Beloit and Anixter International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Regal Beloit $3.22 billion 1.06 $203.40 million $4.60 16.70
Anixter International $7.62 billion 0.33 $120.50 million $4.28 17.80

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

Analyst Ratings

This is a summary of recent recommendations for Regal Beloit and Anixter International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Regal Beloit 0 5 5 0 2.50
Anixter International 0 3 1 0 2.25

Regal Beloit presently has a consensus target price of $86.63, suggesting a potential upside of 12.79%. Anixter International has a consensus target price of $86.00, suggesting a potential upside of 12.86%. Given Anixter International’s higher probable upside, analysts plainly believe Anixter International is more favorable than Regal Beloit.

Dividends

Regal Beloit pays an annual dividend of $1.04 per share and has a dividend yield of 1.4%. Anixter International does not pay a dividend. Regal Beloit pays out 22.6% of its earnings in the form of a dividend. Anixter International has raised its dividend for 8 consecutive years.

Summary

Regal Beloit beats Anixter International on 9 of the 17 factors compared between the two stocks.

About Regal Beloit

Regal Beloit Corporation is a manufacturer of electric motors, electrical motion controls, power generation and power transmission products. The Company operates through three segments: the Commercial and Industrial Systems segment, with its principal line of business in medium and large electric motors, power generation products, high-performance drives and controls and capacitors; the Climate Solutions segment, with its principal line of business in small motors, controls and air moving products, and the Power Transmission Solutions segment, with its principal line of business in power transmission gearing, hydraulic pump drives, open gearing and specialty mechanical products which control motion and torque. It sells its products directly to original equipment manufacturers (OEMs), distributors and end users. It operates distribution facilities in Plainfield, Indiana; McAllen, Texas; LaVergne, Tennessee, and Florence, Kentucky.

About Anixter International

Anixter International Inc. is engaged in the distribution of enterprise cabling and security solutions, electrical and electronic wire and cable products and utility power solutions. The Company operates through three segments: Network & Security Solutions (NSS), Electrical & Electronic Solutions (EES), and Utility Power Solutions (UPS). The NSS segment’s product portfolio includes access control, power, cable management, wireless, professional audio/video, voice and networking switches, and other ancillary products. The EES segment’s product portfolio includes electrical and electronic wire and cable, shipboard cable, support and supply products, low-voltage cable, instrumentation cable, industrial communication and control products, security cable, connectors, industrial Ethernet switches, and voice and data cable. The UPS segment supplies electrical transmission and distribution products, power plant maintenance, repair and operations supplies, and smart-grid products.

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