Comparing Rockwell Automation (NYSE:ROK) & Garmin (NYSE:GRMN)

Garmin (NYSE:GRMN) and Rockwell Automation (NYSE:ROK) are both large-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.

Institutional & Insider Ownership

81.6% of Garmin shares are held by institutional investors. Comparatively, 75.8% of Rockwell Automation shares are held by institutional investors. 15.4% of Garmin shares are held by insiders. Comparatively, 0.8% of Rockwell Automation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Garmin and Rockwell Automation, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Garmin	0	4	2	1	2.57
Rockwell Automation	0	10	9	1	2.55

Garmin presently has a consensus target price of $269.40, suggesting a potential upside of 13.06%. Rockwell Automation has a consensus target price of $449.16, suggesting a potential downside of 1.57%. Given Garmin’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Garmin is more favorable than Rockwell Automation.

Profitability

This table compares Garmin and Rockwell Automation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Garmin	23.26%	20.07%	16.34%
Rockwell Automation	12.36%	37.54%	12.30%

Earnings & Valuation

This table compares Garmin and Rockwell Automation”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Garmin	$7.25 billion	6.34	$1.66 billion	$8.97	26.56
Rockwell Automation	$8.34 billion	6.09	$869.00 million	$9.62	47.44

Garmin has higher earnings, but lower revenue than Rockwell Automation. Garmin is trading at a lower price-to-earnings ratio than Rockwell Automation, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Garmin has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, Rockwell Automation has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500.

Dividends

Garmin pays an annual dividend of $3.60 per share and has a dividend yield of 1.5%. Rockwell Automation pays an annual dividend of $5.52 per share and has a dividend yield of 1.2%. Garmin pays out 40.1% of its earnings in the form of a dividend. Rockwell Automation pays out 57.4% 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. Garmin has increased its dividend for 8 consecutive years and Rockwell Automation has increased its dividend for 15 consecutive years. Garmin is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Garmin beats Rockwell Automation on 10 of the 17 factors compared between the two stocks.

About Garmin

Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices worldwide. Its Fitness segment offers running and multi-sport watches; cycling products; smartwatch devices; scales and monitors; and fitness accessories. This segment also provides Garmin Connect and Garmin Connect Mobile, which are web and mobile platforms where users can track and analyze their fitness, activities and workouts, and wellness data; and Connect IQ, an application development platform. The company's Outdoor segment offers adventure watches, outdoor handhelds and satellite communicators, golf devices, consumer automotive devices, and dog devices, as well as InReach and Gramin response communication device. Its Aviation segment designs, manufactures, and markets various aircraft avionics solutions, including integrated flight decks, electronic flight displays and instrumentation, navigation and communication products, automatic flight control systems and safety-enhancing technologies, audio control systems, engine indication systems, traffic awareness and avoidance solutions, ADS-B and transponders, weather information and avoidance solutions, datalink and connectivity solutions, and various services. The company's Marine segment provides chartplotters and multi-function displays, cartography products, fishfinders, sonar products, autopilot systems, radars, compliant instrument displays and sensors, VHF communication radios, handhelds and wearable devices, sailing products, audio products and accessories, digital switching products, and trolling motors. Its Auto segment offers embedded domain controllers and infotainment units; and software, map database, cameras, wearables, and automotive solutions. The company sells its products through independent retailers, dealers, distributors, installation and repair shops, and original equipment manufacturers, as well as online webshop. Garmin Ltd. was founded in 1989 and is based in Schaffhausen, Switzerland.

About Rockwell Automation

Rockwell Automation, Inc. provides industrial automation and digital transformation solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates through three segments, Intelligent Devices, Software & Control, and Lifecycle Services. Its solutions include hardware and software products and services. The Intelligent Devices segment offers drives, motion, safety, sensing, industrial components, and configured-to-order products. The Software & Control segment provides control and visualization software and hardware, information software, and network and security infrastructure solutions. The Lifecycle Services segment provides consulting, professional services and solutions, and connected and maintenance services. The company sells its solutions primarily through independent distributors in relation with its direct sales force. It serves discrete end markets, including automotive, semiconductor, and warehousing and logistics, as well as general industries comprising printing and publishing, marine, glass, fiber and textiles, airports, and aerospace; hybrid end markets, such as food and beverage, life sciences, household and personal care, and tire, as well as eco industrial, including water/wastewater, waste management, mass transit, and renewable energy; and process end markets comprising oil and gas, mining, metals, chemicals, pulp and paper, and others. Rockwell Automation, Inc. was founded in 1903 and is headquartered in Milwaukee, Wisconsin.