Xylem (XYL) versus IDEX Corporation (IEX) Critical Analysis
Xylem (NYSE: XYL) and IDEX Corporation (NYSE:IEX) are both mid-cap industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.
This is a breakdown of current recommendations for Xylem and IDEX Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Xylem presently has a consensus price target of $59.45, indicating a potential downside of 4.14%. IDEX Corporation has a consensus price target of $104.43, indicating a potential downside of 10.93%. Given Xylem’s stronger consensus rating and higher possible upside, research analysts clearly believe Xylem is more favorable than IDEX Corporation.
Valuation & Earnings
This table compares Xylem and IDEX Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Xylem||$4.23 billion||2.63||$723.00 million||$1.55||40.01|
|IDEX Corporation||$2.19 billion||4.09||$554.19 million||$3.73||31.43|
Xylem has higher revenue and earnings than IDEX Corporation. IDEX Corporation is trading at a lower price-to-earnings ratio than Xylem, indicating that it is currently the more affordable of the two stocks.
This table compares Xylem and IDEX Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Xylem has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, IDEX Corporation has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.
Insider & Institutional Ownership
86.5% of Xylem shares are owned by institutional investors. Comparatively, 99.1% of IDEX Corporation shares are owned by institutional investors. 0.8% of Xylem shares are owned by insiders. Comparatively, 1.0% of IDEX Corporation shares are owned by 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.
Xylem pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. IDEX Corporation pays an annual dividend of $1.48 per share and has a dividend yield of 1.3%. Xylem pays out 46.5% of its earnings in the form of a dividend. IDEX Corporation pays out 39.7% 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. Xylem has increased its dividend for 7 consecutive years and IDEX Corporation has increased its dividend for 4 consecutive years. IDEX Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
IDEX Corporation beats Xylem on 11 of the 17 factors compared between the two stocks.
Xylem Company Profile
Xylem Inc. is a water technology company. The Company designs, manufactures and services engineered solutions across a range of critical applications. It is an equipment and service provider for water and wastewater applications with a portfolio of products and services addressing the cycle of water, from collection, distribution and use to the return of water to the environment. It has three business segments, which include Water Infrastructure, Applied Water and Sensus. Water Infrastructure focuses on the transportation, treatment and testing of water, offering a range of products, including water and wastewater pumps, and controls and systems. Applied Water serves the uses of water and focuses on the residential, commercial, industrial and agricultural markets. The Sensus segment’s products include metering, networked communications, measurement and control technologies, software and services, including cloud-based analytics, remote monitoring and data management.
IDEX Corporation Company Profile
IDEX Corporation (IDEX) operates an applied solutions business that sells pumps, flow meters and other fluidics systems, and components and engineered products. The Company operates through three segments: Fluid & Metering Technologies (FMT), Health & Science Technologies (HST) and Fire & Safety/Diversified Products (FSDP). With its segments, as of December 31, 2016, the Company maintained 13 platforms, where it focused on growth and acquisitions. The Company’s FMT segment provides flow monitoring and other services for the food, chemical, general industrial, water and wastewater, agricultural and energy industries. The HST segment designs, produces and distributes precision fluidics, rotary lobe pumps, centrifugal and positive displacement pumps, roll compaction and drying systems. Its FSDP segment produces firefighting pumps and controls, rescue tools, lifting bags and other components and systems; engineered stainless steel banding and clamping devices, and precision equipment.
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