Financial Analysis: Park-Ohio (PKOH) and Welbilt (WBT)

Park-Ohio (NASDAQ: PKOH) and Welbilt (NYSE:WBT) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Park-Ohio and Welbilt, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Park-Ohio 0 2 0 0 2.00
Welbilt 0 3 3 0 2.50

Park-Ohio presently has a consensus price target of $37.00, suggesting a potential downside of 6.80%. Welbilt has a consensus price target of $24.00, suggesting a potential upside of 15.83%. Given Welbilt’s stronger consensus rating and higher possible upside, analysts plainly believe Welbilt is more favorable than Park-Ohio.

Profitability

This table compares Park-Ohio and Welbilt’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Park-Ohio 2.16% 14.79% 3.63%
Welbilt 6.14% -2,645.52% 5.23%

Earnings & Valuation

This table compares Park-Ohio and Welbilt’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Park-Ohio $1.28 billion 0.39 $31.70 million $2.36 16.82
Welbilt $1.46 billion 1.98 $79.50 million $0.64 32.38

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

Dividends

Park-Ohio pays an annual dividend of $0.50 per share and has a dividend yield of 1.3%. Welbilt does not pay a dividend. Park-Ohio pays out 21.2% of its earnings in the form of a dividend.

Risk & Volatility

Park-Ohio has a beta of 3.23, indicating that its share price is 223% more volatile than the S&P 500. Comparatively, Welbilt has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.

Insider and Institutional Ownership

55.2% of Park-Ohio shares are owned by institutional investors. Comparatively, 91.3% of Welbilt shares are owned by institutional investors. 31.0% of Park-Ohio shares are owned by company insiders. Comparatively, 0.7% of Welbilt shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Welbilt beats Park-Ohio on 11 of the 16 factors compared between the two stocks.

Park-Ohio Company Profile

Park-Ohio Holdings Corp. is a diversified international company providing supply chain management outsourcing services, capital equipment used on their production lines and manufactured components used to assemble its products. The Company operates in three segments: Supply Technologies, Assembly Components and Engineered Products. Supply Technologies provides its customers with Total Supply Management, which manages every aspect of supplying production parts and materials to its customers’ manufacturing floor, from strategic planning to program implementation. Assembly Components manufactures products oriented towards fuel efficiency and reduced emission standards. Engineered Products segment operates a group of manufacturing businesses that design and manufacture a range of products, including induction heating and melting systems, pipe threading systems, and forged and machined products. It operates through the subsidiaries of its direct subsidiary, Park-Ohio Industries, Inc.

Welbilt Company Profile

Welbilt, Inc., formerly Manitowoc Foodservice, Inc., is a commercial foodservice equipment company. The Company designs, manufactures and supplies food and beverage equipment for the global commercial foodservice market, offering customers operator and patron insights, kitchen solutions, culinary expertise, and implementation support and service. It operates through three segments: Americas, EMEA and APAC. The Americas segment includes the United States, Canada and Latin America. The EMEA segment consists of markets in Europe, Middle East and Africa, including Russia and the commonwealth of independent states. The APAC segment consists of markets in China, Singapore, Australia, India, Malaysia, Indonesia, Thailand and the Philippines. It supplies foodservice equipment to commercial and institutional foodservice operators. Its brands include Cleveland, Convotherm, Delfield, fitKitchen, Frymaster, Garland, Kolpak, Lincoln, Manitowoc Ice, Merco, Merrychef and Multiplex.

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