Critical Analysis: Park-Ohio (PKOH) and SPX (SPXC)
Park-Ohio (NASDAQ: PKOH) and SPX (NYSE:SPXC) are both small-cap industrial products companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.
Risk and Volatility
Park-Ohio has a beta of 3.47, indicating that its stock price is 247% more volatile than the S&P 500. Comparatively, SPX has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500.
55.9% of Park-Ohio shares are held by institutional investors. Comparatively, 86.9% of SPX shares are held by institutional investors. 31.0% of Park-Ohio shares are held by insiders. Comparatively, 0.6% of SPX shares are held by 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.
This table compares Park-Ohio and SPX’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Park-Ohio pays an annual dividend of $0.50 per share and has a dividend yield of 1.1%. SPX does not pay a dividend. Park-Ohio pays out 21.2% of its earnings in the form of a dividend.
This is a breakdown of current ratings and price targets for Park-Ohio and SPX, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Park-Ohio presently has a consensus target price of $37.00, indicating a potential downside of 20.43%. Given Park-Ohio’s higher possible upside, analysts plainly believe Park-Ohio is more favorable than SPX.
Valuation and Earnings
This table compares Park-Ohio and SPX’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Park-Ohio||$1.28 billion||0.46||$31.70 million||$2.36||19.70|
|SPX||$1.47 billion||0.95||-$67.20 million||$0.77||42.68|
Park-Ohio has higher earnings, but lower revenue than SPX. Park-Ohio is trading at a lower price-to-earnings ratio than SPX, indicating that it is currently the more affordable of the two stocks.
Park-Ohio Company Profile
Park-Ohio Holdings Corp. is a diversified international company providing supply chain management outsourcing services, capital equipment used on their production lines and manufactured components used to assemble its products. The Company operates in three segments: Supply Technologies, Assembly Components and Engineered Products. Supply Technologies provides its customers with Total Supply Management, which manages every aspect of supplying production parts and materials to its customers’ manufacturing floor, from strategic planning to program implementation. Assembly Components manufactures products oriented towards fuel efficiency and reduced emission standards. Engineered Products segment operates a group of manufacturing businesses that design and manufacture a range of products, including induction heating and melting systems, pipe threading systems, and forged and machined products. It operates through the subsidiaries of its direct subsidiary, Park-Ohio Industries, Inc.
SPX Company Profile
SPX Corporation is a global supplier of infrastructure equipment. The Company operates through three segments: HVAC; Detection and Measurement, and Engineered Solutions. The HVAC solutions offered by its businesses include package cooling towers, residential and commercial boilers, heating and ventilation products. Its detection and measurement product lines encompass underground pipe and cable locators, and inspection equipment. Within its power platform, it is a manufacturer of medium and large power transformers, as well as equipment for various types of power plant, including cooling equipment, heat exchangers and pollution control systems. As of December 31, 2016, the Company had operations in approximately 15 countries.
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