Park-Ohio Holdings Corp. (PKOH) versus Snap-On (SNA) Critical Review
Park-Ohio Holdings Corp. (NASDAQ: PKOH) and Snap-On (NYSE:SNA) are both industrial products companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.
This table compares Park-Ohio Holdings Corp. and Snap-On’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Park-Ohio Holdings Corp.||2.50%||16.90%||4.14%|
Institutional and Insider Ownership
58.4% of Park-Ohio Holdings Corp. shares are owned by institutional investors. Comparatively, 93.3% of Snap-On shares are owned by institutional investors. 31.0% of Park-Ohio Holdings Corp. shares are owned by company insiders. Comparatively, 3.7% of Snap-On shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of current ratings and price targets for Park-Ohio Holdings Corp. and Snap-On, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Park-Ohio Holdings Corp.||0||0||2||0||3.00|
Park-Ohio Holdings Corp. presently has a consensus price target of $45.67, suggesting a potential upside of 12.62%. Snap-On has a consensus price target of $197.00, suggesting a potential upside of 33.14%. Given Snap-On’s higher probable upside, analysts plainly believe Snap-On is more favorable than Park-Ohio Holdings Corp..
Valuation and Earnings
This table compares Park-Ohio Holdings Corp. and Snap-On’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Park-Ohio Holdings Corp.||$1.31 billion||0.38||$111.10 million||$2.66||15.24|
|Snap-On||$3.83 billion||2.22||$971.00 million||$9.68||15.29|
Snap-On has higher revenue and earnings than Park-Ohio Holdings Corp.. Park-Ohio Holdings Corp. is trading at a lower price-to-earnings ratio than Snap-On, indicating that it is currently the more affordable of the two stocks.
Park-Ohio Holdings Corp. pays an annual dividend of $0.50 per share and has a dividend yield of 1.2%. Snap-On pays an annual dividend of $2.84 per share and has a dividend yield of 1.9%. Park-Ohio Holdings Corp. pays out 18.8% of its earnings in the form of a dividend. Snap-On pays out 29.3% 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. Snap-On has increased its dividend for 7 consecutive years. Snap-On is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
Park-Ohio Holdings Corp. has a beta of 3.47, suggesting that its stock price is 247% more volatile than the S&P 500. Comparatively, Snap-On has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.
Snap-On beats Park-Ohio Holdings Corp. on 13 of the 17 factors compared between the two stocks.
Park-Ohio Holdings Corp. Company Profile
Park-Ohio Holdings Corp. is a diversified international company providing supply chain management outsourcing services, capital equipment used on their production lines and manufactured components used to assemble its products. The Company operates in three segments: Supply Technologies, Assembly Components and Engineered Products. Supply Technologies provides its customers with Total Supply Management, which manages every aspect of supplying production parts and materials to its customers’ manufacturing floor, from strategic planning to program implementation. Assembly Components manufactures products oriented towards fuel efficiency and reduced emission standards. Engineered Products segment operates a group of manufacturing businesses that design and manufacture a range of products, including induction heating and melting systems, pipe threading systems, and forged and machined products. It operates through the subsidiaries of its direct subsidiary, Park-Ohio Industries, Inc.
Snap-On Company Profile
Snap-on Incorporated is a manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions. The Company’s segments include the Commercial & Industrial Group, the Snap-on Tools Group, the Repair Systems & Information Group, and Financial Services. The Commercial & Industrial Group consists of business operations serving a range of industrial and commercial customers, including customers in the aerospace, natural resources, government, power generation, transportation and technical education markets. The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians. The Repair Systems & Information Group consists of business operations serving other professional vehicle repair customers, primarily owners and managers of independent repair shops and original equipment manufacturer (OEM) dealership service and repair shops. Financial Services consists of the business operations of its finance subsidiaries.
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