Financial Analysis: Global Industrial (NYSE:GIC) versus Hillenbrand (NYSE:HI)

Global Industrial (NYSE:GIC) and Hillenbrand (NYSE:HI) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for Global Industrial and Hillenbrand, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Industrial	1	1	0	0	1.50
Hillenbrand	0	5	0	0	2.00

Hillenbrand has a consensus target price of $32.00, suggesting a potential upside of 1.01%. Given Hillenbrand’s stronger consensus rating and higher possible upside, analysts plainly believe Hillenbrand is more favorable than Global Industrial.

Valuation and Earnings

This table compares Global Industrial and Hillenbrand”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Industrial	$1.32 billion	0.87	$61.00 million	$1.75	17.00
Hillenbrand	$2.67 billion	0.84	$43.10 million	$0.61	51.93

Global Industrial has higher earnings, but lower revenue than Hillenbrand. Global Industrial is trading at a lower price-to-earnings ratio than Hillenbrand, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

31.2% of Global Industrial shares are held by institutional investors. Comparatively, 89.1% of Hillenbrand shares are held by institutional investors. 64.2% of Global Industrial shares are held by insiders. Comparatively, 2.0% of Hillenbrand shares are held by 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

Global Industrial pays an annual dividend of $1.04 per share and has a dividend yield of 3.5%. Hillenbrand pays an annual dividend of $0.91 per share and has a dividend yield of 2.9%. Global Industrial pays out 59.4% of its earnings in the form of a dividend. Hillenbrand pays out 149.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Global Industrial has raised its dividend for 9 consecutive years and Hillenbrand has raised its dividend for 18 consecutive years. Global Industrial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Global Industrial has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Hillenbrand has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500.

Profitability

This table compares Global Industrial and Hillenbrand’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Global Industrial	5.11%	22.85%	12.11%
Hillenbrand	1.61%	12.69%	3.71%

Summary

Global Industrial beats Hillenbrand on 9 of the 16 factors compared between the two stocks.

About Global Industrial

Global Industrial Company operates as an industrial distributor of various industrial and maintenance, repair, and operation (MRO) products in North America. It offers storage and shelving, safety and security, carts and trucks, HVAC and fans, furniture and decor, material handling, janitorial and facility maintenance, workbenches and shop desks, tools and instruments, plumbing and pumps, office and school supplies, packaging and shipping, lighting and electrical, foodservice and retail, medical and laboratory, motors and power transmission, building supplies, machining, fasteners and hardware, vehicle maintenance, and raw materials. The company offers industrial and MRO products under the Global, GlobalIndustrial.com, Nexel, Paramount, Interion, and Absocold trademarks. It serves businesses; state, local, and private educational organizations; and government entities through relationship marketers, e-commerce sites, signature campaigns, and catalogs. The company was formerly known as Systemax Inc. Global Industrial Company was founded in 1949 and is headquartered in Port Washington, New York.

About Hillenbrand

Hillenbrand, Inc. operates as an industrial company in the United States and internationally. The company operates through two segments, Advanced Process Solutions and Molding Technology Solutions. The Advanced Process Solutions segment designs, engineers, manufactures, markets, and services process and material handling equipment and systems comprising compounding, extrusion, and material handling equipment, equipment system design services, as well as offers mixing technology, ingredient automation, and portion process; and provides screening and separating equipment for various industries, including plastics, food and pharmaceuticals, chemicals, fertilizers, minerals, energy, wastewater treatment, forest products, and other general industrials. The Molding Technology Solutions segment offers injection molding and extrusion equipment; hot runner systems; process control systems; mold bases and components; maintenance and repair services; and aftermarket parts and service for various industries, including automotive, consumer goods, medical, packaging, construction, and electronics. The company was founded in 1906 and is headquartered in Batesville, Indiana.