Financial Analysis: Eaton (ETN) versus Aixtron (AIXNY)
Eaton (NYSE: ETN) and Aixtron (OTCMKTS:AIXNY) are both industrial products companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.
Volatility & Risk
Eaton has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500. Comparatively, Aixtron has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.
This is a summary of recent recommendations for Eaton and Aixtron, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Eaton presently has a consensus target price of $82.33, suggesting a potential upside of 5.88%. Given Eaton’s stronger consensus rating and higher possible upside, equities analysts clearly believe Eaton is more favorable than Aixtron.
Earnings and Valuation
This table compares Eaton and Aixtron’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Eaton||$19.75 billion||1.74||$1.92 billion||$6.37||12.21|
Eaton has higher revenue and earnings than Aixtron. Aixtron is trading at a lower price-to-earnings ratio than Eaton, indicating that it is currently the more affordable of the two stocks.
This table compares Eaton and Aixtron’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Eaton pays an annual dividend of $2.40 per share and has a dividend yield of 3.1%. Aixtron does not pay a dividend. Eaton pays out 37.7% of its earnings in the form of a dividend. Aixtron has raised its dividend for 7 consecutive years.
Insider and Institutional Ownership
76.7% of Eaton shares are owned by institutional investors. Comparatively, 0.4% of Aixtron shares are owned by institutional investors. 0.8% of Eaton shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Eaton beats Aixtron on 12 of the 14 factors compared between the two stocks.
Eaton Corporation (Eaton) is a diversified power management company. It is engaged in the manufacturing of electrical components and systems for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use, and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety. On January 1, 2011, it closed the acquisition of the Tuthill Coupling Group, which is a division of the Tuthill Corporation. It has five segments: Electrical Americas and Electrical Rest of World; Hydraulics; Aerospace; Truck, and Automotive. On October 1, 2010, it acquired CopperLogic, Inc. On July 15, 2010, it acquired EMC Engineers, Inc. In May 2011, it acquired Internormen Technology Group. In August 2011, it acquired IE Power, Inc. In December 2011, it acquired E.A. Pedersen Company.
AIXTRON SE is a provider of deposition equipment to the semiconductor industry. The Company’s technology solutions are used by a range of customers across the world to build components for electronic and opto-electronic applications based on compound, silicon or organic semiconductor materials. Such components are used in fiber optic communication systems, wireless and mobile telephony applications, optical and electronic storage devices, computing, signaling and lighting, displays, as well as a range of other technologies. The Company’s business activities include developing, producing and installing equipment for the deposition of semiconductor and other complex materials, process engineering, consulting and training, including ongoing customer support and after-sales service. The Company supplies its customers with both production-scale material deposition systems and small scale systems for research and development (R&D) or small scale production.
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