Reviewing AZZ (AZZ) & Spectrum Brands Holdings (SPB)
AZZ (NYSE: AZZ) and Spectrum Brands Holdings (NYSE:SPB) are both industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, earnings, analyst recommendations, valuation and institutional ownership.
Earnings and Valuation
This table compares AZZ and Spectrum Brands Holdings’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|AZZ||$820.18 million||1.49||$143.90 million||$1.97||23.96|
|Spectrum Brands Holdings||$4.94 billion||1.29||$865.80 million||$4.90||22.46|
Spectrum Brands Holdings has higher revenue and earnings than AZZ. Spectrum Brands Holdings is trading at a lower price-to-earnings ratio than AZZ, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
85.4% of AZZ shares are owned by institutional investors. Comparatively, 47.0% of Spectrum Brands Holdings shares are owned by institutional investors. 0.0% of AZZ shares are owned by insiders. Comparatively, 1.0% of Spectrum Brands Holdings shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
AZZ pays an annual dividend of $0.68 per share and has a dividend yield of 1.4%. Spectrum Brands Holdings pays an annual dividend of $1.68 per share and has a dividend yield of 1.5%. AZZ pays out 34.5% of its earnings in the form of a dividend. Spectrum Brands Holdings pays out 34.3% 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. AZZ has raised its dividend for 3 consecutive years and Spectrum Brands Holdings has raised its dividend for 3 consecutive years. Spectrum Brands Holdings is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
AZZ has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500. Comparatively, Spectrum Brands Holdings has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.
This is a breakdown of recent recommendations for AZZ and Spectrum Brands Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Spectrum Brands Holdings||0||1||8||0||2.89|
AZZ currently has a consensus price target of $52.00, suggesting a potential upside of 10.17%. Spectrum Brands Holdings has a consensus price target of $142.29, suggesting a potential upside of 29.32%. Given Spectrum Brands Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe Spectrum Brands Holdings is more favorable than AZZ.
This table compares AZZ and Spectrum Brands Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Spectrum Brands Holdings||5.87%||17.46%||4.45%|
Spectrum Brands Holdings beats AZZ on 10 of the 16 factors compared between the two stocks.
AZZ Inc. is a provider of galvanizing services, welding solutions, specialty electrical equipment and engineered services to the power generation, transmission, distribution, refining and industrial markets. The Company operates through two segments: Energy segment and Galvanizing segment. Its Energy segment provides products and services designed to support industrial, nuclear and electrical applications. Its product offerings include custom switchgear, electrical enclosures, medium and high voltage bus ducts, explosion proof and hazardous duty lighting, nuclear safety-related equipment and tubular products. Its Galvanizing segment provides hot dip galvanizing to the steel fabrication industry through facilities located throughout the United States and Canada. It serves fabricators or manufacturers that provide services to the electrical and telecommunications, bridge and highway, petrochemical and general industrial markets and various original equipment manufacturers.
About Spectrum Brands Holdings
Spectrum Brands Holdings, Inc. (SB Holdings) is a diversified global consumer products company. The Company manufactures, markets and/or distributes its products in approximately 160 countries in the North America (NA); Europe, the Middle East and Africa (EMEA); Latin America (LATAM), and Asia-Pacific (APAC) regions. It has five segments: Global Batteries & Appliances (GBA), Global Pet Supplies (PET), Home and Garden (H&G), Hardware & Home Improvement (HHI) and Global Auto Care (GAC). The Company’s GBA segment includes product categories, such as consumer batteries, small appliances and personal care. The Company’s HHI segment includes product categories, such as lockset, plumbing and hardware. The Company’s PET segment’s product categories include aquatics, companion animal and pet food. The Company’s H&G segment’s product categories include controls, household and repellents. The Company’s GAC segment’s product categories include appearance, performance and A/C recharge.
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