Franklin Electric (NASDAQ:FELE) versus AZZ (NYSE:AZZ) Head-To-Head Comparison

Franklin Electric (NASDAQ:FELE) and AZZ (NYSE:AZZ) are both mid-cap industrials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Insider and Institutional Ownership

80.0% of Franklin Electric shares are held by institutional investors. Comparatively, 90.9% of AZZ shares are held by institutional investors. 2.7% of Franklin Electric shares are held by insiders. Comparatively, 1.8% of AZZ shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Franklin Electric and AZZ”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Electric	$2.02 billion	2.18	$180.31 million	$3.07	32.32
AZZ	$1.59 billion	2.08	$128.83 million	$10.40	10.64

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

Risk & Volatility

Franklin Electric has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, AZZ has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Franklin Electric and AZZ, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Electric	0	2	0	0	2.00
AZZ	0	3	6	1	2.80

Franklin Electric presently has a consensus target price of $112.00, suggesting a potential upside of 12.89%. AZZ has a consensus target price of $116.33, suggesting a potential upside of 5.18%. Given Franklin Electric’s higher probable upside, equities research analysts clearly believe Franklin Electric is more favorable than AZZ.

Dividends

Franklin Electric pays an annual dividend of $1.06 per share and has a dividend yield of 1.1%. AZZ pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Franklin Electric pays out 34.5% of its earnings in the form of a dividend. AZZ pays out 7.7% 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. Franklin Electric has raised its dividend for 33 consecutive years. Franklin Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Franklin Electric and AZZ’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Electric	6.71%	14.24%	9.46%
AZZ	19.69%	15.01%	7.78%

About Franklin Electric

Franklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. The company operates through Water Systems, Fueling Systems, and Distribution segments. The Water Systems segment offers submersible motors, drives, pumps, electronic controls, water treatment systems, monitoring devices, and related parts and equipment. Its motors and pumps are used principally for pumping clean water and wastewater in various residential, agricultural, municipal, and industrial applications; and manufactures electronic drives and controls that are used in motors for controlling functionality, as well as provides protection from various hazards, such as electrical surges, over-heating, and dry wells or tanks. The Fueling Systems segment provides pumps, pipes, sumps, fittings, vapor recovery components, electronic controls, monitoring devices, and related parts and equipment primarily for use in fueling system applications. This segment serves other energy markets, such as power reliability systems, as well as includes electronic devices for online monitoring of the power utility, hydroelectric, and telecommunication and data center infrastructure. The Distribution segment sells to and provides presale support and specifications to the installing contractors. It sells products produced by the Water Systems segment. The company sells its products to wholesale and retail distributors, specialty distributors, original equipment manufacturers, industrial and petroleum equipment distributors, and oil and utility companies through its employee sales force and independent manufacturing representatives. Franklin Electric Co., Inc. was founded in 1944 and is headquartered in Fort Wayne, Indiana.

About AZZ

AZZ Inc. provides hot-dip galvanizing and coil coating solutions in North America. It offers metal finishing solutions for corrosion protection, including hot-dip galvanizing, spin galvanizing, powder coating, anodizing, and plating to steel fabrication and other industries, as well as to fabricators or manufacturers that provide services to the transmission and distribution, bridge and highway, petrochemical, and general industrial markets; and original equipment manufacturers. It also provides aesthetic and corrosion protective coatings and related value-added services for steel and aluminum coil primarily serving the construction; appliance; heating, ventilation, and air conditioning; container; transportation; and other end markets. The company was incorporated in 1956 and is headquartered in Fort Worth, Texas.