Parker-Hannifin (NYSE: PH) and Newport (NASDAQ:NEWP) are both industrial products companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.

Dividends

Parker-Hannifin pays an annual dividend of $2.64 per share and has a dividend yield of 1.4%. Newport does not pay a dividend. Parker-Hannifin pays out 33.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings and price targets for Parker-Hannifin and Newport, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Parker-Hannifin 0 7 13 0 2.65
Newport 0 0 0 0 N/A

Parker-Hannifin currently has a consensus target price of $187.95, indicating a potential upside of 1.97%. Given Parker-Hannifin’s higher probable upside, equities research analysts clearly believe Parker-Hannifin is more favorable than Newport.

Earnings & Valuation

This table compares Parker-Hannifin and Newport’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Parker-Hannifin $12.03 billion 2.04 $983.41 million $7.78 23.69
Newport N/A N/A N/A $0.78 29.47

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

Profitability

This table compares Parker-Hannifin and Newport’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Parker-Hannifin 8.37% 23.61% 8.13%
Newport 6.37% 10.63% 6.60%

Insider & Institutional Ownership

78.2% of Parker-Hannifin shares are held by institutional investors. 1.1% of Parker-Hannifin shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Parker-Hannifin beats Newport on 10 of the 11 factors compared between the two stocks.

About Parker-Hannifin

Parker-Hannifin Corporation is a manufacturer of motion and control technologies and systems, providing precision engineered solutions for a range of mobile, industrial and aerospace markets. The Company operates through segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial Segment is an aggregation of several business units, which manufacture motion-control and fluid power system components for builders and users of various types of manufacturing, packaging, processing, transportation, agricultural, construction, and military vehicles and equipment. The Diversified Industrial Segment consists of Automation Group, Engineered Materials Group, Filtration Group, Fluid Connectors Group, Hydraulics Group and Instrumentation Group. The Aerospace Systems Segment produces hydraulic, fuel, pneumatic and electro-mechanical systems and components, which are utilized on domestic commercial, military and general aviation aircrafts.

About Newport

Newport Corporation is a supplier of technology products and systems. The Company offers its products and services to a range of industries, including scientific research, microelectronics, defense and security, life and health sciences, and industrial markets. The Company operates through three business segments: Photonics Group, which includes photonics instruments and systems, vibration isolation systems and subsystems, precision positioning systems and subsystems, optical components for research applications, optical hardware, and three-dimensional non-contact measurement sensors and equipment; Lasers Group, which offers a portfolio of laser technology products and services, including ultrafast lasers and amplifiers, fiber lasers, diode-pumped solid-state lasers, and high-energy pulsed lasers and tunable lasers, and Optics Group, which offers precision optics and lens assemblies, thin-film filters and coatings, replicated mirrors, and ruled and holographic diffraction gratings.

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