Contrasting AZZ (AZZ) & FARO Technologies (FARO)
AZZ (NYSE: AZZ) and FARO Technologies (NASDAQ:FARO) are both small-cap industrial products companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, analyst recommendations, institutional ownership and dividends.
Institutional and Insider Ownership
85.8% of AZZ shares are owned by institutional investors. Comparatively, 94.6% of FARO Technologies shares are owned by institutional investors. 0.0% of AZZ shares are owned by company insiders. Comparatively, 2.4% of FARO Technologies 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.
Risk & Volatility
AZZ has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500. Comparatively, FARO Technologies has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.
AZZ pays an annual dividend of $0.68 per share and has a dividend yield of 1.3%. FARO Technologies does not pay a dividend. AZZ pays out 33.5% of its earnings in the form of a dividend. FARO Technologies has increased its dividend for 3 consecutive years.
This is a breakdown of recent recommendations and price targets for AZZ and FARO Technologies, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
AZZ presently has a consensus price target of $56.00, suggesting a potential upside of 9.70%. FARO Technologies has a consensus price target of $41.00, suggesting a potential upside of 12.79%. Given FARO Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe FARO Technologies is more favorable than AZZ.
Earnings and Valuation
This table compares AZZ and FARO Technologies’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|AZZ||$824.81 million||1.61||$143.90 million||$2.03||25.15|
|FARO Technologies||$335.54 million||1.81||$13.50 million||($0.03)||-1,211.26|
AZZ has higher revenue and earnings than FARO Technologies. FARO Technologies is trading at a lower price-to-earnings ratio than AZZ, indicating that it is currently the more affordable of the two stocks.
This table compares AZZ and FARO Technologies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
AZZ Inc. is a provider of galvanizing services, welding solutions, specialty electrical equipment and engineered services to the power generation, transmission, distribution, refining and industrial markets. The Company operates through two segments: Energy segment and Galvanizing segment. Its Energy segment provides products and services designed to support industrial, nuclear and electrical applications. Its product offerings include custom switchgear, electrical enclosures, medium and high voltage bus ducts, explosion proof and hazardous duty lighting, nuclear safety-related equipment and tubular products. Its Galvanizing segment provides hot dip galvanizing to the steel fabrication industry through facilities located throughout the United States and Canada. It serves fabricators or manufacturers that provide services to the electrical and telecommunications, bridge and highway, petrochemical and general industrial markets and various original equipment manufacturers.
About FARO Technologies
FARO Technologies, Inc. designs, develops, manufactures, markets and supports software driven, three-dimensional (3D) measurement, imaging and realization systems. The Company operates in three segments: Factory Metrology, Construction BIM-CIM and Other. It sells its products through a direct sales force across customers in a range of manufacturing, industrial, architecture, surveying, building construction and law enforcement applications. Its FaroArm, FARO Laser ScanArm, FARO Gage, FARO Laser Tracker, FARO Cobalt Array 3D Imager AMP, and their companion CAM2 software provide for Computer-Aided Design-based inspection and/or factory-level statistical process control and surveying. It operates in international markets throughout the world and maintain sales offices in Australia, Brazil, Canada, China, India, Italy, Japan, Malaysia, Mexico, the Netherlands, Poland, Portugal, Singapore, South Korea, Spain, Switzerland, Thailand, Turkey, the United Kingdom, the United States and Vietnam.
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