Financial Contrast: Twin Disc (NASDAQ:TWIN) and Burnham (OTCMKTS:BURCA)

Twin Disc (NASDAQ:TWIN) and Burnham (OTCMKTS:BURCA) are both small-cap industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Institutional & Insider Ownership

65.3% of Twin Disc shares are owned by institutional investors. Comparatively, 1.5% of Burnham shares are owned by institutional investors. 22.1% of Twin Disc shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Twin Disc and Burnham’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Twin Disc	7.32%	2.77%	1.29%
Burnham	-7.96%	11.89%	7.37%

Dividends

Twin Disc pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. Burnham pays an annual dividend of $0.92 per share and has a dividend yield of 3.7%. Twin Disc pays out 8.7% of its earnings in the form of a dividend. Burnham pays out -20.1% 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. Burnham is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Twin Disc and Burnham”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Twin Disc	$340.74 million	0.85	-$1.89 million	$1.84	10.88
Burnham	$258.11 million	0.33	-$21.45 million	($4.58)	-5.46

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Twin Disc and Burnham, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Twin Disc	0	2	0	0	2.00
Burnham	0	0	0	0	0.00

Risk & Volatility

Twin Disc has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, Burnham has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500.

Summary

Twin Disc beats Burnham on 10 of the 14 factors compared between the two stocks.

About Twin Disc

Twin Disc, Incorporated engages in the design, manufacture, and sale of marine and heavy duty off-highway power transmission equipment in the United States, the Netherlands, China, Australia, Italy, and internationally. The company operates in two segments, Manufacturing and Distribution. Its principal products include marine transmissions, azimuth drives, surface drives, propellers, and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches, and controls systems. The company also provides third-party manufactured products. It sells its products through a direct sales force and distributor network to customers primarily in the pleasure craft, commercial marine, patrol, and military marine markets, as well as in the energy and natural resources, government, agriculture, recycling, construction, oil and gas, and industrial markets. The company was incorporated in 1918 and is headquartered in Milwaukee, Wisconsin.

About Burnham

Burnham Holdings, Inc. designs, manufactures, and sells boilers and related heating, ventilation, and air conditioning products and accessories for residential, commercial, and industrial applications in the United States and internationally. Its residential hydronic heating products include cast iron, stainless steel, and steel boilers; cast iron and steel heat distribution products; radiators; and warm air furnaces and central air conditioning systems for the residential heating and cooling markets, including units for the manufactured housing industry. The company's commercial and industrial heating products comprise a range of cast iron, stainless steel, fire tube, water tube, copper tube boilers, and water heaters; and boiler room accessories that are used for various applications, such as military bases, multi-unit residential buildings, health care, government, education, and hospital facilities. The company sells its residential products through wholesale distributors to builders, heating contractors, fuel dealers, and utilities for resale to end-use customers; and commercial products primarily through independent sales representatives, directly to contractors, or end users. Burnham Holdings, Inc. is based in Lancaster, Pennsylvania.