Financial Analysis: Watts Water Technologies (NYSE:WTS) versus Sun Hydraulics Corporation (SNHY)
Watts Water Technologies (NYSE: WTS) and Sun Hydraulics Corporation (NASDAQ:SNHY) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitabiliy, dividends, analyst recommendations and valuation.
Institutional and Insider Ownership
78.1% of Watts Water Technologies shares are held by institutional investors. Comparatively, 78.7% of Sun Hydraulics Corporation shares are held by institutional investors. 1.1% of Watts Water Technologies shares are held by insiders. Comparatively, 10.7% of Sun Hydraulics Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares Watts Water Technologies and Sun Hydraulics Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Watts Water Technologies||6.40%||12.75%||5.42%|
|Sun Hydraulics Corporation||11.14%||10.57%||7.17%|
This is a summary of current ratings and recommmendations for Watts Water Technologies and Sun Hydraulics Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Watts Water Technologies||0||3||0||0||2.00|
|Sun Hydraulics Corporation||0||0||1||0||3.00|
Watts Water Technologies currently has a consensus target price of $64.50, suggesting a potential upside of 1.98%. Sun Hydraulics Corporation has a consensus target price of $35.00, suggesting a potential downside of 16.65%. Given Watts Water Technologies’ higher possible upside, equities research analysts clearly believe Watts Water Technologies is more favorable than Sun Hydraulics Corporation.
Risk & Volatility
Watts Water Technologies has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Sun Hydraulics Corporation has a beta of 1.81, meaning that its share price is 81% more volatile than the S&P 500.
Watts Water Technologies pays an annual dividend of $0.76 per share and has a dividend yield of 1.2%. Sun Hydraulics Corporation pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. Watts Water Technologies pays out 29.2% of its earnings in the form of a dividend. Sun Hydraulics Corporation pays out 37.9% 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. Watts Water Technologies has increased its dividend for 4 consecutive years. Watts Water Technologies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Watts Water Technologies and Sun Hydraulics Corporation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Watts Water Technologies||$1.40 billion||1.55||$196.00 million||$2.60||24.33|
|Sun Hydraulics Corporation||$227.26 million||5.00||$55.55 million||$0.95||44.20|
Watts Water Technologies has higher revenue and earnings than Sun Hydraulics Corporation. Watts Water Technologies is trading at a lower price-to-earnings ratio than Sun Hydraulics Corporation, indicating that it is currently the more affordable of the two stocks.
Sun Hydraulics Corporation beats Watts Water Technologies on 9 of the 17 factors compared between the two stocks.
About Watts Water Technologies
Watts Water Technologies, Inc. is a supplier of products and solutions that manage and conserve the flow of fluids and energy into, through and out of buildings in the residential and commercial markets. The Company, through its subsidiary, Watts Regulator Co., is engaged in manufacturing products and systems focused on the control, conservation and quality of water, and safety of the people using it. Its segments include Americas, Middle East and Africa and Asia-Pacific. It four product lines include: residential and commercial flow control products, which include products for plumbing and hot water applications; heating, ventilation and air conditioning and gas products, which include boilers, water heaters and heating solutions; drainage and water re-use products, which include drainage products and engineered rain water harvesting solutions, and water quality products, which include point-of-use and point-of-entry water filtration, conditioning and scale prevention systems.
About Sun Hydraulics Corporation
Sun Hydraulics Corporation (Sun) develops and manufactures solutions for the hydraulics and electronics markets. It is engaged in power controls and vehicle technologies lines of business. The Company operates through two segments including hydraulics and electronics. Hydraulics market segment is engaged in manufacturing of screw-in hydraulic cartridge valves, electro-hydraulics, manifolds, and integrated package solutions for the worldwide industrial and mobile hydraulics markets operating under the brand Sun Hydraulics. Electronics market segment provides electronic control, display and instrumentation solutions for both recreational and off-highway vehicles, as well as stationary and power generation equipment and that offered under the brands of Enovation Controls, Murphy and Zero Off.
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