Head-To-Head Analysis: Vertiv (NYSE:VRT) vs. ABB (OTCMKTS:ABBNY)

Vertiv (NYSE:VRT) and ABB (OTCMKTS:ABBNY) are both large-cap industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, profitability, dividends, risk and institutional ownership.

Insider and Institutional Ownership

89.9% of Vertiv shares are held by institutional investors. Comparatively, 1.1% of ABB shares are held by institutional investors. 1.1% of Vertiv shares are held by insiders. Comparatively, 4.9% of ABB shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Vertiv pays an annual dividend of $0.25 per share and has a dividend yield of 0.1%. ABB pays an annual dividend of $0.72 per share and has a dividend yield of 0.7%. Vertiv pays out 5.7% of its earnings in the form of a dividend. ABB pays out 26.0% 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. Vertiv has raised its dividend for 2 consecutive years.

Valuation and Earnings

This table compares Vertiv and ABB”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vertiv	$10.23 billion	9.89	$1.33 billion	$4.42	59.43
ABB	$33.22 billion	5.32	$4.73 billion	$2.77	34.98

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

Volatility & Risk

Vertiv has a beta of 2.07, suggesting that its stock price is 107% more volatile than the S&P 500. Comparatively, ABB has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Vertiv and ABB, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vertiv	0	4	22	2	2.93
ABB	1	11	1	1	2.14

Vertiv presently has a consensus target price of $357.83, indicating a potential upside of 36.21%. ABB has a consensus target price of $58.00, indicating a potential downside of 40.14%. Given Vertiv’s stronger consensus rating and higher possible upside, research analysts clearly believe Vertiv is more favorable than ABB.

Profitability

This table compares Vertiv and ABB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vertiv	15.09%	50.47%	15.87%
ABB	13.86%	31.25%	11.17%

Summary

Vertiv beats ABB on 14 of the 18 factors compared between the two stocks.

About Vertiv

Vertiv Holdings Co, together with its subsidiaries, designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. It offers AC and DC power management products, switchgear and busbar products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure that are integral to the technologies used for various services, including e-commerce, online banking, file sharing, video on-demand, energy storage, wireless communications, Internet of Things, and online gaming. The company also provides lifecycle management services, predictive analytics, and professional services for deploying, maintaining, and optimizing its products and their related systems; and preventative maintenance, acceptance testing, engineering and consulting, performance assessments, remote monitoring, training, spare parts, and digital critical infrastructure software services. It offers its products primarily under the Vertiv, Liebert, NetSure, Geist, E&I, Powerbar, and Avocent brands. The company serves cloud services, financial services, healthcare, transportation, manufacturing, energy, education, government, social media, and retail industries through a network of direct sales professionals, independent sales representatives, channel partners, and original equipment manufacturers. Vertiv Holdings Co is headquartered in Westerville, Ohio.

About ABB

ABB Ltd provides electrification, motion, and automation solutions and products for customers in utilities, industry and transport, and infrastructure in Switzerland, rest of Europe, the Americas, the United States, rest of Asia, the Middle East, Africa, China, and internationally. Its Electrification segment offers renewable power solutions, modular substation packages, distribution automation products, switchboards and panelboards, switchgears, UPS solutions, circuit breakers, measuring and sensing devices, control products, wiring accessories, enclosures and cabling systems, and intelligent home and building solutions. The company's Motion segment designs, manufactures, and sells drives, motors, generators, and traction converters that are driving the low-carbon future for industries, cities, infrastructure, and transportation. The company's Process Automation segment provides control technologies, industrial software, advanced analytics, sensing and measurement technology, and marine propulsion systems; and repair, remote monitoring, preventive maintenance, asset performance management, emission monitoring, and cybersecurity services. The company's Robotics & Discrete Automation segment offers industrial and collaborative robots, autonomous mobile robotics, mapping and navigation solutions, robotic solutions, field services, spare parts, and digital services. This segment also provides solutions based on its programmable logic controllers, industrial PCs, servo motion, transport systems, and machine vision. It serves oil, gas, chemicals, mining, metals, cement, pulp and paper, pharmaceuticals, battery manufacturing, food and beverage, power generation, water, marine, and ports industries. The company was founded in 1883 and is headquartered in Zurich, Switzerland.