Contrasting Donaldson (NYSE:DCI) & Scope Industries (OTCMKTS:SCPJ)

Scope Industries (OTCMKTS:SCPJ) and Donaldson (NYSE:DCI) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Risk and Volatility

Scope Industries has a beta of -0.54, indicating that its stock price is 154% less volatile than the S&P 500. Comparatively, Donaldson has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Profitability

This table compares Scope Industries and Donaldson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scope Industries	N/A	N/A	N/A
Donaldson	10.25%	30.24%	15.11%

Dividends

Scope Industries pays an annual dividend of $10.00 per share and has a dividend yield of 4.0%. Donaldson pays an annual dividend of $1.20 per share and has a dividend yield of 1.3%. Donaldson pays out 37.4% of its earnings in the form of a dividend. Donaldson has raised its dividend for 38 consecutive years.

Earnings & Valuation

This table compares Scope Industries and Donaldson”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scope Industries	N/A	N/A	N/A	N/A	N/A
Donaldson	$3.69 billion	3.00	$367.00 million	$3.21	29.86

Donaldson has higher revenue and earnings than Scope Industries.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Scope Industries and Donaldson, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scope Industries	0	0	0	0	0.00
Donaldson	0	2	3	0	2.60

Donaldson has a consensus price target of $100.00, indicating a potential upside of 4.32%. Given Donaldson’s stronger consensus rating and higher probable upside, analysts clearly believe Donaldson is more favorable than Scope Industries.

Institutional and Insider Ownership

82.8% of Donaldson shares are held by institutional investors. 68.1% of Scope Industries shares are held by insiders. Comparatively, 2.2% of Donaldson shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Donaldson beats Scope Industries on 10 of the 13 factors compared between the two stocks.

About Scope Industries

Scope Industries offers waste material recycling services in the United States. It operates plants for the collection and processing of bakery waste materials into a food supplement for animals. The company sells this food supplement to poultry farms, dairies, feed lots, and pet food manufacturers. Scope Industries also owns and operates a plant in Vernon, California, where certain bakery waste material is processed and converted into edible breadcrumbs for human consumption. The company's customers include prepackaged and restaurant supply food processors. Scope Industries was organized in 1938 and its principal executive offices are located in Santa Monica, California. Scope Industries sold all of the outstanding shares of its wholly owned subsidiary, Scope Beauty Enterprises, Inc., doing business as Marinello Schools of Beauty, to B & H Education, Inc. in March 2004.

About Donaldson

Donaldson Company, Inc. manufactures and sells filtration systems and replacement parts worldwide. The company operates through three segments: Mobile Solutions, Industrial Solutions, and Life Sciences. Its Mobile Solutions segment provides replacement filters for air and liquid filtration applications, such as air filtration systems; liquid filtration systems for fuel, lube, and hydraulic applications; exhaust and emissions systems and sensors; indicators; and monitoring systems. This segment sells its products to original equipment manufacturers (OEMs) in the construction, mining, agriculture, aerospace, defense, and transportation markets; and to independent distributors, and OEM dealer networks. The company's Industrial Solutions segment offers dust, fume, and mist collectors; compressed air and industrial gasses purification systems; and hydraulic and lubricated rotating equipment applications, as well as gas and liquid filtration for industrial processes. This segment sells its products to various distributors, OEMs, and end-users. Its Life Sciences segment provides micro-environment gas and liquid filtration for food, beverage, and industrial processes; bioprocessing equipment, that includes bioreactors and fermenters; and bioprocessing consumables, such as chromatography devices, reagents and filters, and polytetrafluoroethylene membrane-based products, as well as specialized air and gas filtration systems for applications, including hard disk drives, semi-conductor manufacturing and sensors, battery systems, and powertrain components to OEMs and various end-users. The company was founded in 1915 and is headquartered in Bloomington, Minnesota.