Financial Analysis: Eastern (EML) versus Its Rivals

Institutional & Insider Ownership

77.0% of Eastern shares are held by institutional investors. Comparatively, 47.9% of shares of all “PROTECTION – SFTY” companies are held by institutional investors. 17.0% of Eastern shares are held by company insiders. Comparatively, 18.2% of shares of all “PROTECTION – SFTY” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Eastern and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eastern	-3.01%	10.22%	5.25%
Eastern Competitors	-19.22%	-74.50%	-1.08%

Dividends

Eastern pays an annual dividend of $0.44 per share and has a dividend yield of 1.8%. Eastern pays out -33.3% of its earnings in the form of a dividend. As a group, “PROTECTION – SFTY” companies pay a dividend yield of 1.7% and pay out 48.0% of their earnings in the form of a dividend. Eastern is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Eastern and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Eastern	$272.75 million	-$8.53 million	-18.02
Eastern Competitors	$1.24 billion	$110.42 million	46.21

Eastern’s rivals have higher revenue and earnings than Eastern. Eastern is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Risk & Volatility

Eastern has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Eastern’s rivals have a beta of 8.61, suggesting that their average stock price is 761% more volatile than the S&P 500.

Summary

Eastern beats its rivals on 6 of the 11 factors compared.

Eastern Company Profile

The Eastern Company designs, manufactures, and sells engineered solutions to industrial markets in the United States and internationally. The company offers turnkey returnable packaging solutions, which are used in the assembly processes of vehicles, aircraft, and durable goods, as well as in production processes of plastic packaging products, packaged consumer goods, and pharmaceuticals; designs and manufactures blow mold tools and injection blow mold tooling products, and 2-step stretch blow molds and related components for the stretch blow molding industry; and supplies blow molds and change parts to the food, beverage, healthcare, and chemical industries. It also provides rotary latches, compression latches, draw latches, hinges, camlocks, key switches, padlocks, and handles; and development and program management services for custom electromechanical and mechanical systems for original equipment manufacturers (OEMs) and customer applications. In addition, the company designs and manufactures proprietary vision technology for OEMs and aftermarket applications, as well as offers aftermarket components to the heavy- and medium-duty truck, motorhome, and bus markets. The Eastern Company was founded in 1858 and is based in Shelton, Connecticut.