Comparing Otis Worldwide (NYSE:OTIS) & Nordson (NASDAQ:NDSN)

Otis Worldwide (NYSE:OTIS) and Nordson (NASDAQ:NDSN) are both large-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, earnings and profitability.

Insider and Institutional Ownership

88.0% of Otis Worldwide shares are held by institutional investors. Comparatively, 72.1% of Nordson shares are held by institutional investors. 0.1% of Otis Worldwide shares are held by company insiders. Comparatively, 0.8% of Nordson shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Otis Worldwide and Nordson”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Otis Worldwide	$14.65 billion	1.91	$1.38 billion	$3.76	19.35
Nordson	$2.90 billion	5.57	$484.47 million	$9.38	30.93

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Otis Worldwide and Nordson, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Otis Worldwide	1	7	3	1	2.33
Nordson	0	5	4	0	2.44

Otis Worldwide currently has a consensus target price of $97.58, indicating a potential upside of 34.14%. Nordson has a consensus target price of $311.29, indicating a potential upside of 7.29%. Given Otis Worldwide’s higher possible upside, research analysts clearly believe Otis Worldwide is more favorable than Nordson.

Volatility and Risk

Otis Worldwide has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500. Comparatively, Nordson has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.

Dividends

Otis Worldwide pays an annual dividend of $1.76 per share and has a dividend yield of 2.4%. Nordson pays an annual dividend of $3.28 per share and has a dividend yield of 1.1%. Otis Worldwide pays out 46.8% of its earnings in the form of a dividend. Nordson pays out 35.0% 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. Otis Worldwide has increased its dividend for 5 consecutive years and Nordson has increased its dividend for 62 consecutive years.

Profitability

This table compares Otis Worldwide and Nordson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Otis Worldwide	10.11%	-29.39%	14.86%
Nordson	18.19%	20.08%	10.39%

Summary

Nordson beats Otis Worldwide on 11 of the 18 factors compared between the two stocks.

About Otis Worldwide

Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. This segment serves real-estate and building developers, and general contractors. It sells its products directly to customers, as well as through agents and distributors. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. Otis Worldwide Corporation was founded in 1853 and is headquartered in Farmington, Connecticut.

About Nordson

Nordson Corporation engineers, manufactures, and markets products and systems to dispense, apply, and control adhesives, coatings, polymers, sealants, biomaterials, and other fluids worldwide. It operates through three segments: Industrial Precision Solutions; Medical and Fluid Solutions; and Advanced Technology Solutions. The Industrial Precision Solutions segment provides dispensing, coating, and laminating systems for adhesives, lotions, liquids, and fibers to disposable products and roll goods; automated adhesive dispensing systems used in packaged goods industries; components and systems used in the thermoplastic and biopolymer melt stream; precision agriculture spraying solutions; fluid components, such as nozzles, pumps, and filters; and product assembly systems for use in paper and paperboard converting applications, and manufacturing roll goods. It also offers automated and manual dispensing products and systems for cold materials, container coating, liquid finishing, and powder coating, as well as ultraviolet equipment used primarily in curing and drying operations. The Medical and Fluid Solutions segment offers medical devices, including cannulas, catheters, and medical balloons; single-use plastic components; precision manual and semi-automated dispensers; minimally invasive interventional delivery devices; and plastic molded syringes, cartridges, tips, and fluid connection components. The Advanced Technology Solutions segment provides automated dispensing systems for the attachment, protection, and coating of fluids, as well as related gas plasma treatment systems for cleaning and conditioning surfaces; and bond testing and automated optical, acoustic microscopy, and x-ray inspection systems for use in semiconductor and printed circuit board industries. The company markets its products through direct sales force, as well as distributors and sales representatives. Nordson Corporation was founded in 1909 and is headquartered in Westlake, Ohio.