Financial Analysis: Barnes Group (B) vs. Actuant (ATU)

Barnes Group (NYSE: B) and Actuant (NYSE:ATU) are both industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Insider & Institutional Ownership

86.3% of Barnes Group shares are held by institutional investors. 8.5% of Barnes Group shares are held by insiders. Comparatively, 1.1% of Actuant shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Barnes Group and Actuant’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Barnes Group 11.20% 12.44% 6.96%
Actuant -5.89% 9.29% 3.32%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Barnes Group and Actuant, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Barnes Group 0 3 3 0 2.50
Actuant 1 7 3 0 2.18

Barnes Group currently has a consensus price target of $67.00, suggesting a potential downside of 1.25%. Actuant has a consensus price target of $24.38, suggesting a potential downside of 6.25%. Given Barnes Group’s stronger consensus rating and higher possible upside, analysts plainly believe Barnes Group is more favorable than Actuant.

Earnings and Valuation

This table compares Barnes Group and Actuant’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Barnes Group $1.23 billion 2.96 $135.60 million $2.84 23.89
Actuant $1.10 billion 1.42 -$66.21 million ($1.11) -23.42

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

Risk and Volatility

Barnes Group has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Actuant has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500.

Dividends

Barnes Group pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. Actuant pays an annual dividend of $0.04 per share and has a dividend yield of 0.2%. Barnes Group pays out 19.7% of its earnings in the form of a dividend. Actuant pays out -3.6% 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. Actuant has raised its dividend for 5 consecutive years.

Summary

Barnes Group beats Actuant on 13 of the 16 factors compared between the two stocks.

About Barnes Group

Barnes Group Inc. is an industrial and aerospace manufacturer and service provider, serving a range of end markets and customers. The Company’s engineered products, industrial technologies, and solutions are used in applications that provide transportation, manufacturing, healthcare products and technology to the world. Its segments include Industrial and Aerospace. The Industrial segment is engaged in the manufacturing of precision parts, products and systems for applications serving a customer base in end-markets, such as transportation, industrial equipment, consumer products, packaging, electronics, medical devices and energy. The Industrial segment includes the Molding Solutions, Nitrogen Gas Products and Engineered Components business units. The Aerospace segment includes the original equipment manufacturer (OEM) business and the aftermarket business, which includes maintenance repair and overhaul services and the manufacture and delivery of aerospace aftermarket spare parts.

About Actuant

Actuant Corporation designs, manufactures and distributes a range of industrial products and systems to various end markets. The Company operates through three segments: Industrial, Energy and Engineered Solutions. The Company’s Industrial segment is primarily involved in the design, manufacture and distribution of branded hydraulic and mechanical tools to the maintenance, industrial, infrastructure and production automation markets. The Company’s Energy segment provides joint integrity products and services, customized offshore vessel mooring solutions, as well as rope and cable solutions to the global oil and gas, power generation and other energy markets. The Company’s Engineered Solutions segment provides engineered position and motion control systems to original equipment manufacturers (OEM) in various on and off-highway vehicle markets, as well as various other products to the industrial and agricultural markets.

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