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Financial Review: Franklin Electric Co. (NASDAQ:FELE) & Ampco-Pittsburgh Corporation (AP)

Franklin Electric Co. (NASDAQ: FELE) and Ampco-Pittsburgh Corporation (NYSE:AP) are both small-cap industrial products companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, institutional ownership, profitabiliy, dividends, analyst recommendations and valuation. Earnings & Valuation

This table compares Franklin Electric Co. and Ampco-Pittsburgh Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Franklin Electric Co. £1.00 billion 1.85 £146.27 million £1.84 21.63
Ampco-Pittsburgh Corporation £371.80 million 0.44 £3.04 million (£6.31) -2.12

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

Franklin Electric Co. has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500. Comparatively, Ampco-Pittsburgh Corporation has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500. Analyst Recommendations

This is a summary of recent ratings and target prices for Franklin Electric Co. and Ampco-Pittsburgh Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Franklin Electric Co. 0 0 1 0 3.00
Ampco-Pittsburgh Corporation 0 1 0 0 2.00

Franklin Electric Co. currently has a consensus target price of £52.00, suggesting a potential upside of 30.65%. Ampco-Pittsburgh Corporation has a consensus target price of £16.00, suggesting a potential upside of 19.85%. Given Franklin Electric Co.’s stronger consensus rating and higher possible upside, analysts clearly believe Franklin Electric Co. is more favorable than Ampco-Pittsburgh Corporation.

Profitability This table compares Franklin Electric Co. and Ampco-Pittsburgh Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Franklin Electric Co. 8.62% 13.10% 7.72%
Ampco-Pittsburgh Corporation -20.83% -24.28% -7.55%

Dividends Franklin Electric Co. pays an annual dividend of £0.43 per share and has a dividend yield of 1.1%.

Ampco-Pittsburgh Corporation pays an annual dividend of £0.36 per share and has a dividend yield of 2.7%. Franklin Electric Co. pays out 23.4% of its earnings in the form of a dividend. Ampco-Pittsburgh Corporation pays out -5.7% 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 Co. has increased its dividend for 7 consecutive years. Ampco-Pittsburgh Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

76.9% of Franklin Electric Co. shares are held by institutional investors. Comparatively, 56.5% of Ampco-Pittsburgh Corporation shares are held by institutional investors.

2.5% of Franklin Electric Co. shares are held by company insiders. Comparatively, 29.9% of Ampco-Pittsburgh Corporation shares are held by company insiders.

Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth. Summary Franklin Electric Co. beats Ampco-Pittsburgh Corporation on 13 of the 16 factors compared between the two stocks.

About Franklin Electric Co. Franklin Electric Co. logoFranklin Electric Co., Inc. designs, manufactures and distributes water and fuel pumping systems, consisting of submersible motors, pumps, electronic controls and related parts and equipment. Its segments include Water Systems segment, the Fueling Systems segment and Other.

Its Water Systems segment is engaged in the production and marketing of water pumping systems and offers motors, pumps, drives, electronic controls and monitoring devices. It also designs, manufactures and sells motors, pumps, electronic controls and related parts and equipment for use in groundwater, wastewater and fuel transfer applications. Its Fueling Systems is engaged in the production and marketing of fuel pumping systems, fuel containment systems, and monitoring and control systems.

It also designs, manufactures and sells pumps, pipe, sumps, fittings, vapor recovery components, electronic controls, monitoring devices and related parts and equipment for use in submersible fueling system applications. About Ampco-Pittsburgh Corporation Ampco-Pittsburgh Corporation logoAmpco-Pittsburgh Corporation is engaged in manufacturing and selling specialty metal products and customized equipment utilized by industry throughout the world.

The Company operates through two segments: the Forged and Cast Engineered Products segment, and the Air and Liquid Processing segment. The Forged and Cast Engineered Products segment consists of Union Electric Steel Corporation (Union Electric Steel or UES) and Union Electric Steel UK Limited (UES-UK). The Air and Liquid Processing segment includes Aerofin, Buffalo Air Handling and Buffalo Pumps, all divisions of Air & Liquid Systems Corporation (Air and Liquid), a subsidiary of the Company.

Union Electric Steel produces ingot and forged products that service a range of industries across the globe. UES-UK produces cast rolls for hot and cold strip mills, medium/heavy section mills and plate mills in a range of iron and steel qualities.

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References

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