Critical Survey: MTS Systems Corporation (MTSC) versus Spectrum Brands Holdings (SPB)
MTS Systems Corporation (NASDAQ: MTSC) and Spectrum Brands Holdings (NYSE:SPB) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, profitability and risk.
MTS Systems Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 2.6%. Spectrum Brands Holdings pays an annual dividend of $1.68 per share and has a dividend yield of 1.6%. MTS Systems Corporation pays out 91.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Spectrum Brands Holdings pays out 34.3% of its earnings in the form of a dividend. MTS Systems Corporation has increased its dividend for 3 consecutive years. MTS Systems Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares MTS Systems Corporation and Spectrum Brands Holdings’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|MTS Systems Corporation||$801.32 million||0.99||$113.92 million||$1.31||35.65|
|Spectrum Brands Holdings||$4.94 billion||1.27||$865.80 million||$4.90||22.03|
Spectrum Brands Holdings has higher revenue and earnings than MTS Systems Corporation. Spectrum Brands Holdings is trading at a lower price-to-earnings ratio than MTS Systems Corporation, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
MTS Systems Corporation has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Spectrum Brands Holdings has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.
This is a summary of recent ratings for MTS Systems Corporation and Spectrum Brands Holdings, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MTS Systems Corporation||0||2||2||0||2.50|
|Spectrum Brands Holdings||0||1||7||0||2.88|
MTS Systems Corporation currently has a consensus target price of $58.00, indicating a potential upside of 24.20%. Spectrum Brands Holdings has a consensus target price of $142.43, indicating a potential upside of 31.93%. Given Spectrum Brands Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe Spectrum Brands Holdings is more favorable than MTS Systems Corporation.
Insider and Institutional Ownership
48.4% of Spectrum Brands Holdings shares are owned by institutional investors. 1.5% of MTS Systems Corporation shares are owned by company insiders. Comparatively, 1.0% of Spectrum Brands Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This table compares MTS Systems Corporation and Spectrum Brands Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MTS Systems Corporation||3.13%||12.49%||4.31%|
|Spectrum Brands Holdings||5.87%||17.46%||4.45%|
Spectrum Brands Holdings beats MTS Systems Corporation on 12 of the 17 factors compared between the two stocks.
MTS Systems Corporation Company Profile
MTS Systems Corporation is a supplier of test systems and position sensors. The Company operates through two segments: Test and Sensors. The Test segment provides testing solutions, including hardware, software and services to ground vehicles, materials and structures markets. The Sensors segment provides position sensors for a range of industrial and mobile hydraulic applications. The Sensors segment products are used by industrial machinery and mobile equipment manufacturers to automate the operation of their products for safety and end-user productivity. The Sensors segment manufactures products utilizing magnetostriction technology. Its technology, Temposonics, offers non-contact position sensing. Its Temposonics sensors provide position feedback for motion control systems. It also provides various service offerings, including calibration, maintenance, training and consulting. The Company has its manufacturing facilities in North America, Europe and Asia.
Spectrum Brands Holdings Company Profile
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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