Financial Analysis: ATS (NYSE:ATS) & Tennant (NYSE:TNC)

Tennant (NYSE:TNC) and ATS (NYSE:ATS) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Earnings and Valuation

This table compares Tennant and ATS”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tennant	$1.29 billion	1.07	$83.70 million	$2.92	26.09
ATS	$1.82 billion	1.53	-$20.16 million	($0.01)	-2,842.50

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

Profitability

This table compares Tennant and ATS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tennant	4.42%	16.55%	8.65%
ATS	-0.08%	8.82%	3.37%

Insider and Institutional Ownership

93.3% of Tennant shares are owned by institutional investors. Comparatively, 75.8% of ATS shares are owned by institutional investors. 2.6% of Tennant shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Tennant and ATS, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tennant	0	2	1	0	2.33
ATS	1	2	2	0	2.20

Tennant presently has a consensus price target of $102.00, indicating a potential upside of 33.88%. ATS has a consensus price target of $35.00, indicating a potential upside of 23.13%. Given Tennant’s stronger consensus rating and higher possible upside, analysts plainly believe Tennant is more favorable than ATS.

Risk & Volatility

Tennant has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, ATS has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.

Summary

Tennant beats ATS on 10 of the 14 factors compared between the two stocks.

About Tennant

Tennant Company, together with its subsidiaries, designs, manufactures, and markets floor cleaning equipment in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers a suite of products, including floor maintenance and cleaning equipment, detergent-free and other sustainable cleaning technologies, aftermarket parts and consumables, equipment maintenance and repair services, and asset management solutions. It provides business solutions, such as financing, rental, and leasing programs, as well as machine-to-machine asset management solutions. The company offers its products under the Tennant, Nobles, Alfa Uma Empresa Tennant, IPC, Gaomei, and Rongen brands, as well as private-label brands. Its products are used in retail establishments and distribution centers; factories and warehouses; and public venues, such as arenas and stadiums, office buildings, schools and universities, hospitals and clinics, and other environments. The company markets its products to contract cleaners and businesses through direct sales and service organizations, as well as through a network of authorized distributors. Tennant Company was founded in 1870 and is headquartered in Eden Prairie, Minnesota.

About ATS

ATS Corporation, together with its subsidiaries, provides automation solutions worldwide. The company is also involved in planning, designing, building, commissioning, and servicing automated manufacturing and assembly systems, including automation products and test solutions. In addition, it offers pre-automation services comprising discovery and analysis, concept development, simulation, and total cost of ownership modelling; post automation services, including training, process optimization, preventative maintenance, emergency and on-call support, spare parts, retooling, retrofits, and equipment relocation; and contract manufacturing services, as well as after sales and services. Further, the company provides engineering design, prototyping, process verification, specification writing, software and manufacturing process controls development, standard automation products/platforms, equipment design and build, third-party equipment qualification, procurement and integration, automation system installation, product line commissioning, validation, and documentation services. Additionally, it offers value engineering, supply chain management, and integration and manufacturing capabilities, as well as other automation products and solutions; and software and digital solutions comprising connected factory floor management systems to capture, analyze, and use real time machine performance data to troubleshoot, deliver process and product solutions, prevent equipment downtime, drive operational efficiency, and unlock performance for sustainable production improvements. ATS Corporation serves life sciences, transportation and mobility, consumer products, food and beverage, electronics, nuclear, packaging, warehousing and distribution, and energy markets. The company was formerly known as ATS Automation Tooling Systems Inc. and changed its name to ATS Corporation in November 2022. ATS Corporation was founded in 1978 and is headquartered in Cambridge, Canada.