Head to Head Contrast: Franklin Electric Co. (FELE) and Xylem (XYL)
Franklin Electric Co. (NASDAQ: FELE) and Xylem (NYSE:XYL) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, profitabiliy, risk and analyst recommendations.
Volatility & Risk
Franklin Electric Co. has a beta of 1.62, suggesting that its stock price is 62% more volatile than the S&P 500. Comparatively, Xylem has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.
Earnings & Valuation
This table compares Franklin Electric Co. and Xylem’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Franklin Electric Co.||$951.68 million||1.94||$143.74 million||$1.70||23.41|
|Xylem||$4.00 billion||2.44||$665.00 million||$1.43||37.99|
Xylem has higher revenue and earnings than Franklin Electric Co.. Franklin Electric Co. is trading at a lower price-to-earnings ratio than Xylem, indicating that it is currently the more affordable of the two stocks.
Franklin Electric Co. pays an annual dividend of $0.43 per share and has a dividend yield of 1.1%. Xylem pays an annual dividend of $0.72 per share and has a dividend yield of 1.3%. Franklin Electric Co. pays out 25.3% of its earnings in the form of a dividend. Xylem pays out 50.4% 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. Franklin Electric Co. has increased its dividend for 4 consecutive years and Xylem has increased its dividend for 7 consecutive years. Xylem is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Franklin Electric Co. and Xylem’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Franklin Electric Co.||8.48%||13.04%||7.72%|
This is a summary of recent recommendations and price targets for Franklin Electric Co. and Xylem, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Franklin Electric Co.||0||0||1||0||3.00|
Franklin Electric Co. currently has a consensus price target of $40.00, indicating a potential upside of 0.50%. Xylem has a consensus price target of $55.58, indicating a potential upside of 2.31%. Given Xylem’s higher possible upside, analysts plainly believe Xylem is more favorable than Franklin Electric Co..
Institutional and Insider Ownership
78.9% of Franklin Electric Co. shares are held by institutional investors. Comparatively, 85.8% of Xylem shares are held by institutional investors. 2.5% of Franklin Electric Co. shares are held by insiders. Comparatively, 0.8% of Xylem shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Xylem beats Franklin Electric Co. on 10 of the 17 factors compared between the two stocks.
About Franklin Electric Co.
Franklin Electric Co., Inc. designs, manufactures and distributes water and fuel pumping systems, consisting of submersible motors, pumps, electronic controls and related parts and equipment. Its segments include Water Systems segment, the Fueling Systems segment and Other. Its Water Systems segment is engaged in the production and marketing of water pumping systems and offers motors, pumps, drives, electronic controls and monitoring devices. It also designs, manufactures and sells motors, pumps, electronic controls and related parts and equipment for use in groundwater, wastewater and fuel transfer applications. Its Fueling Systems is engaged in the production and marketing of fuel pumping systems, fuel containment systems, and monitoring and control systems. It also designs, manufactures and sells pumps, pipe, sumps, fittings, vapor recovery components, electronic controls, monitoring devices and related parts and equipment for use in submersible fueling system applications.
Xylem Inc. is a water technology company. The Company designs, manufactures and services engineered solutions across a range of critical applications. It is an equipment and service provider for water and wastewater applications with a portfolio of products and services addressing the cycle of water, from collection, distribution and use to the return of water to the environment. It has three business segments, which include Water Infrastructure, Applied Water and Sensus. Water Infrastructure focuses on the transportation, treatment and testing of water, offering a range of products, including water and wastewater pumps, and controls and systems. Applied Water serves the uses of water and focuses on the residential, commercial, industrial and agricultural markets. The Sensus segment’s products include metering, networked communications, measurement and control technologies, software and services, including cloud-based analytics, remote monitoring and data management.
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