Fanuc (OTCMKTS:FANUY) vs. Otis Worldwide (NYSE:OTIS) Critical Contrast

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fanuc	20.11%	9.60%	8.65%
Otis Worldwide	10.17%	-28.50%	14.39%

Institutional & Insider Ownership

1.5% of Fanuc shares are owned by institutional investors. Comparatively, 88.0% of Otis Worldwide shares are owned by institutional investors. 0.1% of Otis Worldwide shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Fanuc pays an annual dividend of $0.21 per share and has a dividend yield of 1.1%. Otis Worldwide pays an annual dividend of $1.76 per share and has a dividend yield of 2.6%. Fanuc pays out 33.9% of its earnings in the form of a dividend. Otis Worldwide pays out 45.2% 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. Otis Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Fanuc has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Otis Worldwide has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fanuc	0	2	0	1	2.67
Otis Worldwide	1	5	4	0	2.30

Otis Worldwide has a consensus target price of $92.91, indicating a potential upside of 39.23%. Given Otis Worldwide’s higher probable upside, analysts plainly believe Otis Worldwide is more favorable than Fanuc.

Earnings and Valuation

This table compares Fanuc and Otis Worldwide”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fanuc	$5.70 billion	6.59	$1.10 billion	$0.62	30.82
Otis Worldwide	$14.43 billion	1.76	$1.38 billion	$3.89	17.15

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

Summary

Otis Worldwide beats Fanuc on 10 of the 18 factors compared between the two stocks.

About Fanuc

FANUC Corporation provides factory automation products in Japan, the Americas, Europe, China, the rest of Asia, and internationally. The company offers CNC series products, servo motors, lasers, robots, compact machining centers, electric injection molding machines, wire electrical discharge machines, and ultra-precision machines. It also provides FANUC intelligent edge link and drive system, an open platform for the manufacturing industry. FANUC Corporation was incorporated in 1950 and is headquartered in Yamanashi, Japan.

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.