Comparing Curtiss-Wright (CW) & Eaton (ETN)

Curtiss-Wright (NYSE: CW) and Eaton (NYSE:ETN) are both aerospace companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Insider & Institutional Ownership

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78.7% of Curtiss-Wright shares are owned by institutional investors. Comparatively, 78.9% of Eaton shares are owned by institutional investors. 0.9% of Curtiss-Wright shares are owned by insiders. Comparatively, 0.5% of Eaton shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Curtiss-Wright and Eaton, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Curtiss-Wright 0 2 6 0 2.75
Eaton 0 9 8 0 2.47

Curtiss-Wright currently has a consensus price target of $135.29, indicating a potential downside of 3.00%. Eaton has a consensus price target of $86.71, indicating a potential upside of 11.96%. Given Eaton’s higher possible upside, analysts plainly believe Eaton is more favorable than Curtiss-Wright.

Valuation and Earnings

This table compares Curtiss-Wright and Eaton’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Curtiss-Wright $2.27 billion 2.71 $214.89 million $5.03 27.73
Eaton $20.40 billion 1.67 $2.99 billion $4.65 16.66

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

Profitability

This table compares Curtiss-Wright and Eaton’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Curtiss-Wright 9.46% 15.46% 7.02%
Eaton 14.60% 12.84% 6.53%

Risk and Volatility

Curtiss-Wright has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Eaton has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500.

Dividends

Curtiss-Wright pays an annual dividend of $0.60 per share and has a dividend yield of 0.4%. Eaton pays an annual dividend of $2.64 per share and has a dividend yield of 3.4%. Curtiss-Wright pays out 11.9% of its earnings in the form of a dividend. Eaton pays out 56.8% 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. Curtiss-Wright has increased its dividend for 6 consecutive years and Eaton has increased its dividend for 8 consecutive years. Eaton is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Eaton beats Curtiss-Wright on 9 of the 17 factors compared between the two stocks.

Curtiss-Wright Company Profile

Curtiss-Wright Corporation is a manufacturing and service company that designs, manufactures, and overhauls precision components and provides engineered products and services to the aerospace, defense, power generation and general industrial markets. The Company operates through three segments: Commercial/Industrial, Defense and Power. The Commercial/Industrial segment’s products include electronic throttle control devices and transmission shifters, electro-mechanical actuation control components, valves, and surface technology services. The Defense segment’s products include commercial off-the-shelf (COTS) embedded computing board level modules, turret aiming and stabilization products, weapons handling systems, avionics and electronics, flight test equipment, and aircraft data management solutions. The Power segment’s products include a range of hardware, pumps, valves, fastening systems, specialized containment doors, airlock hatches and spent fuel management products.

Eaton Company Profile

Eaton Corporation plc operates as a power management company worldwide. Its Electrical Products segment offers electrical and industrial components, residential products, single phase power quality products, emergency lighting and fire detection products, wiring devices, structural support systems, and circuit protection and lighting products. The company's Electrical Systems and Services segment provides power distribution and assemblies, three phase power quality products, hazardous duty electrical equipment, explosion-proof instrumentation, utility power distribution equipment, power reliability equipment, and services. Its Hydraulics segment offers various power products, controls and sensing products, fluid conveyance products, filtration systems solutions, industrial drum and disc brakes, and golf grips. The company's Aerospace segment provides hydraulic power generation systems, controls and sensing products, fluid conveyance products, and fuel systems for commercial and military use. Its Vehicle segment designs, manufactures, markets, and supplies drivetrain and powertrain systems, and critical components, including transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, cylinder heads, locking and limited slip differentials, transmission controls, fuel vapor components, fluid connectors, and conveyance products. The company serves industrial, institutional, governmental, utility, commercial, residential, information technology, renewable energy, marine, agriculture, oil and gas, construction, mining, forestry, material handling, truck and bus, machine tools, molding, primary metals, and power generation markets, as well as original equipment manufacturers and aftermarket customers of heavy, medium, and light-duty trucks, SUVs, CUVs, passenger cars, and agricultural equipment. Eaton Corporation plc was founded in 1916 and is based in Dublin, Ireland.

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