AZZ (AZZ) vs. Rockwell Automation (ROK) Critical Analysis
AZZ (NYSE: AZZ) and Rockwell Automation (NYSE:ROK) are both industrial products companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.
AZZ pays an annual dividend of $0.68 per share and has a dividend yield of 1.5%. Rockwell Automation pays an annual dividend of $3.04 per share and has a dividend yield of 1.7%. AZZ pays out 34.5% of its earnings in the form of a dividend. Rockwell Automation pays out 49.0% 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. AZZ has raised its dividend for 7 consecutive years and Rockwell Automation has raised its dividend for 3 consecutive years.
Risk and Volatility
AZZ has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500. Comparatively, Rockwell Automation has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.
This table compares AZZ and Rockwell Automation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current recommendations and price targets for AZZ and Rockwell Automation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
AZZ presently has a consensus price target of $52.00, indicating a potential upside of 10.99%. Rockwell Automation has a consensus price target of $158.08, indicating a potential downside of 13.49%. Given AZZ’s higher possible upside, analysts plainly believe AZZ is more favorable than Rockwell Automation.
Earnings & Valuation
This table compares AZZ and Rockwell Automation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|AZZ||$820.18 million||1.48||$143.90 million||$1.97||23.78|
|Rockwell Automation||$6.18 billion||3.80||$1.22 billion||$6.20||29.47|
Rockwell Automation has higher revenue and earnings than AZZ. AZZ is trading at a lower price-to-earnings ratio than Rockwell Automation, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
85.4% of AZZ shares are held by institutional investors. Comparatively, 73.6% of Rockwell Automation shares are held by institutional investors. 0.0% of AZZ shares are held by insiders. Comparatively, 1.7% of Rockwell Automation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Rockwell Automation beats AZZ on 12 of the 17 factors compared between the two stocks.
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 Rockwell Automation
Rockwell Automation, Inc. (Rockwell Automation) is a provider of industrial automation power, control and information solutions for manufacturers. The Company operates through two segments: Architecture & Software and Control Products & Solutions. The Architecture & Software segment contains various hardware, software and communication components of the Company’s integrated control and information architecture capable of controlling the customer’s industrial processes and connecting with their manufacturing enterprise. Architecture & Software has a portfolio of products, including Control platforms that perform multiple control disciplines and monitoring of applications, including discrete, batch and continuous process, drives control, motion control and machine safety control. The Control Products & Solutions segment portfolio includes low and medium voltage electro-mechanical and electronic motor starters, signaling devices, termination and protection devices, relays and timers.
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