Eaton (NYSE: ETN) and Global Power Equipment Group (OTCMKTS:GLPW) are both industrial products companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.
Insider and Institutional Ownership
76.5% of Eaton shares are held by institutional investors. Comparatively, 28.0% of Global Power Equipment Group shares are held by institutional investors. 0.8% of Eaton shares are held by insiders. Comparatively, 1.9% of Global Power Equipment Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Eaton pays an annual dividend of $2.40 per share and has a dividend yield of 3.0%. Global Power Equipment Group does not pay a dividend. Eaton pays out 37.7% of its earnings in the form of a dividend. Eaton has increased its dividend for 7 consecutive years.
This table compares Eaton and Global Power Equipment Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Global Power Equipment Group||-13.08%||-64.02%||-21.06%|
Earnings and Valuation
This table compares Eaton and Global Power Equipment Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Eaton||$19.75 billion||1.76||$1.92 billion||$6.37||12.40|
|Global Power Equipment Group||$418.59 million||0.17||-$43.61 million||($2.60)||-1.53|
Eaton has higher revenue and earnings than Global Power Equipment Group. Global Power Equipment Group is trading at a lower price-to-earnings ratio than Eaton, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Eaton has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500. Comparatively, Global Power Equipment Group has a beta of 2.14, indicating that its share price is 114% more volatile than the S&P 500.
This is a summary of recent ratings and price targets for Eaton and Global Power Equipment Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Global Power Equipment Group||0||0||0||0||N/A|
Eaton presently has a consensus target price of $82.33, suggesting a potential upside of 4.21%. Given Eaton’s higher probable upside, research analysts clearly believe Eaton is more favorable than Global Power Equipment Group.
Eaton beats Global Power Equipment Group on 13 of the 16 factors compared between the two stocks.
Eaton Corporation (Eaton) is a diversified power management company. It is engaged in the manufacturing of electrical components and systems for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use, and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety. On January 1, 2011, it closed the acquisition of the Tuthill Coupling Group, which is a division of the Tuthill Corporation. It has five segments: Electrical Americas and Electrical Rest of World; Hydraulics; Aerospace; Truck, and Automotive. On October 1, 2010, it acquired CopperLogic, Inc. On July 15, 2010, it acquired EMC Engineers, Inc. In May 2011, it acquired Internormen Technology Group. In August 2011, it acquired IE Power, Inc. In December 2011, it acquired E.A. Pedersen Company.
About Global Power Equipment Group
Global Power Equipment Group Inc. is a design, engineering and manufacturing company providing an array of equipment and services to the global power infrastructure, energy and process industries. The Products segment includes two primary product categories: Electrical Solutions, which provides custom-configured electrical houses and generator enclosures for various industries. The Services segment provides lifecycle maintenance, repair, on-site specialty support, outage management, construction and fabrication services for the power generation, industrial, chemical/petrochemical processing, and oil and gas industries. Its products portfolio span from auxiliary equipment for gas turbines to small, high alloy parts, such as seals, shims and brackets. It also offers a range of services that have been managing plant asset value, including general and specialty construction, maintenance and modification, and plant management support services.
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