EnPro Industries (NYSE: NPO) and Lydall (NYSE:LDL) are both small-cap industrial products companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.

Institutional & Insider Ownership

95.6% of EnPro Industries shares are owned by institutional investors. Comparatively, 88.4% of Lydall shares are owned by institutional investors. 2.6% of EnPro Industries shares are owned by company insiders. Comparatively, 5.0% of Lydall shares are owned 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for EnPro Industries and Lydall, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EnPro Industries 0 0 2 0 3.00
Lydall 0 1 1 0 2.50

EnPro Industries currently has a consensus target price of $85.00, suggesting a potential upside of 22.64%. Lydall has a consensus target price of $63.00, suggesting a potential upside of 35.05%. Given Lydall’s higher possible upside, analysts clearly believe Lydall is more favorable than EnPro Industries.

Volatility and Risk

EnPro Industries has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Lydall has a beta of 1.68, suggesting that its stock price is 68% more volatile than the S&P 500.

Earnings and Valuation

This table compares EnPro Industries and Lydall’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EnPro Industries $1.18 billion 1.25 $162.20 million $0.85 81.54
Lydall $640.28 million 1.26 $92.46 million $2.45 19.04

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

Profitability

This table compares EnPro Industries and Lydall’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EnPro Industries 1.56% 8.71% 2.06%
Lydall 6.56% 17.43% 9.51%

Dividends

EnPro Industries pays an annual dividend of $0.88 per share and has a dividend yield of 1.3%. Lydall does not pay a dividend. EnPro Industries pays out 103.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Lydall beats EnPro Industries on 9 of the 16 factors compared between the two stocks.

About EnPro Industries

EnPro Industries, Inc. is engaged in the designing, developing, manufacturing and marketing engineered industrial products. It operates through three segments. The Sealing Products segment includes three operating divisions: Garlock, which designs, manufactures and sells sealing products; Technetics, which designs, manufactures and sells metal seals and elastomeric seals, among others, and Stemco LP (Stemco), which designs, manufactures and sells heavy-duty truck wheel-end components and systems. The Engineered Products segment includes two industrial products businesses: GGB, which designs, manufactures and sells self-lubricating, non-rolling, metal polymer and engineered plastics, among others, and Compressor Products International, which designs, manufactures, sells and services components. The Power Systems segment includes Fairbanks Morse business, which designs, manufactures, sells and services heavy-duty, medium-speed diesel, natural gas and dual fuel reciprocating engines.

About Lydall

Lydall, Inc. designs and manufactures specialty engineered filtration media, industrial thermal insulating solutions, automotive thermal and acoustical barriers for filtration/separation and thermal/acoustical applications. The Company’s segments are Performance Materials, Technical Nonwovens, Thermal/Acoustical Metals and Thermal/Acoustical Fibers. The Performance Materials segment includes filtration, thermal insulation and life sciences filtration businesses. The Technical Nonwovens segment includes its industrial filtration and advanced materials products. The Thermal/Acoustical Metals segment includes its metal parts and related tooling used in automotive applications. The Thermal/Acoustical Fibers segment includes its fiber parts business and related tooling used in automotive applications. Its Filtration products include LydAir MG (Micro-Glass) Air Filtration Media, LydAir MB (Melt Blown) Air Filtration Media and Arioso Membrane Composite Media.

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