Eaton Corporation, PLC (NYSE: ETN) and Jason Industries (NASDAQ:JASN) are both industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitabiliy, institutional ownership, valuation, earnings and analyst recommendations.

Volatility and Risk

Eaton Corporation, PLC has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Jason Industries has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500.

Profitability

This table compares Eaton Corporation, PLC and Jason Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eaton Corporation, PLC 9.86% 12.82% 6.33%
Jason Industries -9.52% -46.40% -0.87%

Insider & Institutional Ownership

76.3% of Eaton Corporation, PLC shares are owned by institutional investors. Comparatively, 38.7% of Jason Industries shares are owned by institutional investors. 0.8% of Eaton Corporation, PLC shares are owned by insiders. Comparatively, 20.0% of Jason Industries shares are owned 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

Eaton Corporation, PLC pays an annual dividend of $2.40 per share and has a dividend yield of 3.0%. Jason Industries does not pay a dividend. Eaton Corporation, PLC pays out 55.8% of its earnings in the form of a dividend. Eaton Corporation, PLC has increased its dividend for 7 consecutive years.

Earnings & Valuation

This table compares Eaton Corporation, PLC and Jason Industries’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Eaton Corporation, PLC $19.78 billion 1.82 $3.21 billion $4.30 18.75
Jason Industries $689.74 million 0.04 $64.12 million ($3.00) -0.38

Eaton Corporation, PLC has higher revenue and earnings than Jason Industries. Jason Industries is trading at a lower price-to-earnings ratio than Eaton Corporation, PLC, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Eaton Corporation, PLC and Jason Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eaton Corporation, PLC 1 11 7 0 2.32
Jason Industries 0 0 1 0 3.00

Eaton Corporation, PLC currently has a consensus target price of $77.83, indicating a potential downside of 3.44%. Jason Industries has a consensus target price of $3.25, indicating a potential upside of 182.61%. Given Jason Industries’ stronger consensus rating and higher possible upside, analysts clearly believe Jason Industries is more favorable than Eaton Corporation, PLC.

Summary

Eaton Corporation, PLC beats Jason Industries on 12 of the 16 factors compared between the two stocks.

About Eaton Corporation, PLC

Eaton Corporation (Eaton) is a diversified power management company. It is engaged in the manufacturing of electrical components and systems for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use, and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety. On January 1, 2011, it closed the acquisition of the Tuthill Coupling Group, which is a division of the Tuthill Corporation. It has five segments: Electrical Americas and Electrical Rest of World; Hydraulics; Aerospace; Truck, and Automotive. On October 1, 2010, it acquired CopperLogic, Inc. On July 15, 2010, it acquired EMC Engineers, Inc. In May 2011, it acquired Internormen Technology Group. In August 2011, it acquired IE Power, Inc. In December 2011, it acquired E.A. Pedersen Company.

About Jason Industries

Jason Industries is the parent company to a global family of manufacturing leaders within the seating, finishing, components and automotive acoustics markets, including Assembled Products (Buffalo Grove, Ill.), Janesville Acoustics (Southfield, Mich.), Metalex (Libertyville, Ill.), Milsco (Milwaukee, Wis.), Osborn (Richmond, Indiana and Burgwald, Germany) and Sealeze (Richmond, Va.). All Jason companies utilize the Jason Business System, a collaborative manufacturing strategy applicable to a diverse group of companies that includes business principles and processes to ensure best-in-class results and collective strength. Headquartered in Milwaukee, Wis., Jason employs more than 4,000 individuals in 15 countries.

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