Financial Review: Regal Beloit (RBC) versus Anixter International (AXE)

Regal Beloit (NYSE: RBC) and Anixter International (NYSE:AXE) are both mid-cap industrial products companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Dividends

Regal Beloit pays an annual dividend of $1.04 per share and has a dividend yield of 1.3%. Anixter International does not pay a dividend. Regal Beloit pays out 22.6% of its earnings in the form of a dividend. Anixter International has increased its dividend for 7 consecutive years.

Volatility & Risk

Regal Beloit has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, Anixter International has a beta of 2.03, indicating that its share price is 103% more volatile than the S&P 500.

Institutional & Insider Ownership

93.8% of Regal Beloit shares are owned by institutional investors. Comparatively, 87.9% of Anixter International shares are owned by institutional investors. 2.2% of Regal Beloit shares are owned by company insiders. Comparatively, 14.7% of Anixter International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Regal Beloit and Anixter International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Regal Beloit 6.28% 9.76% 4.84%
Anixter International 1.86% 12.52% 4.14%

Analyst Ratings

This is a summary of current ratings and target prices for Regal Beloit and Anixter International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Regal Beloit 0 5 5 0 2.50
Anixter International 0 3 1 0 2.25

Regal Beloit currently has a consensus target price of $86.63, suggesting a potential upside of 10.35%. Anixter International has a consensus target price of $86.00, suggesting a potential upside of 12.93%. Given Anixter International’s higher probable upside, analysts clearly believe Anixter International is more favorable than Regal Beloit.

Valuation and Earnings

This table compares Regal Beloit and Anixter International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Regal Beloit $3.22 billion 1.08 $203.40 million $4.60 17.07
Anixter International $7.62 billion 0.33 $120.50 million $4.28 17.79

Regal Beloit has higher earnings, but lower revenue than Anixter International. Regal Beloit is trading at a lower price-to-earnings ratio than Anixter International, indicating that it is currently the more affordable of the two stocks.

Summary

Regal Beloit beats Anixter International on 9 of the 17 factors compared between the two stocks.

Regal Beloit Company Profile

Regal Beloit Corporation is a manufacturer of electric motors, electrical motion controls, power generation and power transmission products. The Company operates through three segments: the Commercial and Industrial Systems segment, with its principal line of business in medium and large electric motors, power generation products, high-performance drives and controls and capacitors; the Climate Solutions segment, with its principal line of business in small motors, controls and air moving products, and the Power Transmission Solutions segment, with its principal line of business in power transmission gearing, hydraulic pump drives, open gearing and specialty mechanical products which control motion and torque. It sells its products directly to original equipment manufacturers (OEMs), distributors and end users. It operates distribution facilities in Plainfield, Indiana; McAllen, Texas; LaVergne, Tennessee, and Florence, Kentucky.

Anixter International Company Profile

Anixter International Inc. is engaged in the distribution of enterprise cabling and security solutions, electrical and electronic wire and cable products and utility power solutions. The Company operates through three segments: Network & Security Solutions (NSS), Electrical & Electronic Solutions (EES), and Utility Power Solutions (UPS). The NSS segment’s product portfolio includes access control, power, cable management, wireless, professional audio/video, voice and networking switches, and other ancillary products. The EES segment’s product portfolio includes electrical and electronic wire and cable, shipboard cable, support and supply products, low-voltage cable, instrumentation cable, industrial communication and control products, security cable, connectors, industrial Ethernet switches, and voice and data cable. The UPS segment supplies electrical transmission and distribution products, power plant maintenance, repair and operations supplies, and smart-grid products.

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