Reviewing ESCO Technologies (NYSE:ESE) and Sandvik (OTCMKTS:SDVKY)

Sandvik (OTCMKTS:SDVKY) and ESCO Technologies (NYSE:ESE) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations for Sandvik and ESCO Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sandvik	1	8	3	1	2.31
ESCO Technologies	0	1	3	1	3.00

ESCO Technologies has a consensus price target of $416.50, suggesting a potential upside of 56.02%. Given ESCO Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe ESCO Technologies is more favorable than Sandvik.

Dividends

Sandvik pays an annual dividend of $0.41 per share and has a dividend yield of 1.1%. ESCO Technologies pays an annual dividend of $0.32 per share and has a dividend yield of 0.1%. Sandvik pays out 28.3% of its earnings in the form of a dividend. ESCO Technologies pays out 2.6% 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.

Profitability

This table compares Sandvik and ESCO Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sandvik	13.05%	18.45%	9.99%
ESCO Technologies	24.39%	13.28%	8.69%

Earnings and Valuation

This table compares Sandvik and ESCO Technologies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sandvik	$12.34 billion	3.92	$1.50 billion	$1.45	26.55
ESCO Technologies	$1.10 billion	6.31	$299.22 million	$12.14	21.99

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

Institutional and Insider Ownership

0.7% of Sandvik shares are held by institutional investors. Comparatively, 95.7% of ESCO Technologies shares are held by institutional investors. 0.7% of ESCO Technologies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Sandvik has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, ESCO Technologies has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500.

Summary

ESCO Technologies beats Sandvik on 8 of the 15 factors compared between the two stocks.

About Sandvik

Sandvik AB (publ), an engineering company, provides products and solutions for mining and rock excavation, metal cutting, and materials technology worldwide. The company offers mining and rock excavation equipment, including drill rigs and bolters, underground loaders and trucks, mechanical cutting equipment, rock tools and rock drills, and mining automation; rock processing equipment, such as crushers, screens, hydraulic breakers, demolition tools, and breaker booms. It also provides metal-cutting tools and tooling systems, and digital solutions and software; metal powder for additive manufacturing, and components made from controlled expansion alloys; and tungsten powders, as well as recycling services of secondary tungsten raw materials. The company serves aerospace, automotive, energy, general engineering, infrastructure, and mining industries. Sandvik AB (publ) was founded in 1862 and is headquartered in Stockholm, Sweden.

About ESCO Technologies

ESCO Technologies Inc. produces and supplies engineered products and systems for industrial and commercial markets worldwide. It operates through three segments: Aerospace & Defense, Utility Solutions Group, and RF Test & Measurement. The Aerospace & Defense segment designs and manufactures filtration products, including hydraulic filter elements and fluid control devices used in commercial aerospace applications; filter mechanisms used in micro-propulsion devices for satellites; and custom designed filters for manned aircraft and submarines. It also designs, develops, and manufactures elastomeric-based signature reduction solutions for U.S. naval vessels; and mission-critical bushings, pins, sleeves, and precision-tolerance machined components for landing gear, rotor heads, engine mounts, flight controls, and actuation systems for the aerospace and defense industries. The Utility Solutions Group segment provides diagnostic testing solutions that enable electric power grid operators to assess the integrity of high-voltage power delivery equipment; and decision support tools for the renewable energy industry, primarily wind and solar. The RF Test & Measurement segment designs and manufactures RF test and secure communication facilities, acoustic test enclosures, RF and magnetically shielded rooms, RF measurement systems, and broadcast and recording studios; and RF absorptive materials, filters, antennas, field probes, test cells, proprietary measurement software, and other test accessories to perform various tests. The company distributes its products through a network of distributors, sales representatives, direct sales teams, and in-house sales personnel. The company was incorporated in 1990 and is based in Saint Louis, Missouri.