ITT (NYSE: ITT) and Colfax (NYSE:CFX) are both mid-cap multi-sector conglomerates companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.
Risk and Volatility
ITT has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500. Comparatively, Colfax has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500.
ITT pays an annual dividend of $0.54 per share and has a dividend yield of 1.1%. Colfax does not pay a dividend. ITT pays out 20.8% of its earnings in the form of a dividend. ITT has increased its dividend for 5 consecutive years.
This is a breakdown of current ratings and target prices for ITT and Colfax, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ITT currently has a consensus price target of $55.75, suggesting a potential upside of 9.16%. Colfax has a consensus price target of $40.82, suggesting a potential upside of 25.55%. Given Colfax’s higher probable upside, analysts clearly believe Colfax is more favorable than ITT.
Earnings and Valuation
This table compares ITT and Colfax’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|ITT||$2.59 billion||1.74||$113.50 million||$2.59||19.72|
|Colfax||$3.30 billion||1.21||$151.09 million||$1.74||18.68|
Colfax has higher revenue and earnings than ITT. Colfax is trading at a lower price-to-earnings ratio than ITT, indicating that it is currently the more affordable of the two stocks.
This table compares ITT and Colfax’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
94.2% of ITT shares are owned by institutional investors. Comparatively, 77.3% of Colfax shares are owned by institutional investors. 1.0% of ITT shares are owned by company insiders. Comparatively, 10.2% of Colfax shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
ITT beats Colfax on 11 of the 17 factors compared between the two stocks.
ITT Corporation (ITT) is a diversified manufacturer of engineered critical components and technology solutions for industrial markets. The Company’s product and service offerings are organized in four segments: Industrial Process, Motion Technologies, Interconnect Solutions and Control Technologies. Industrial Process manufactures engineered fluid process equipment, and is a provider of plant optimization, solutions and aftermarket services and parts. Motion Technologies manufactures brake components, shock absorbers and damping technologies for the automotive, truck and trailer, public bus and rail transportation markets. Interconnect Solutions manufactures and designs a range of engineered connector solutions that makes it possible to transfer signal and power between electronic devices. Control Technologies manufactures equipment, including actuation, valves, and noise and energy absorption components for the aerospace and defense, and industrial markets.
Colfax Corporation operates as a diversified industrial technology company worldwide. The company operates through Air and Gas Handling, and Fabrication Technology segments. The Air and Gas Handling segment designs, manufactures, and supplies heavy-duty centrifugal and axial fans, rotary heat exchangers, and gas compressors, as well as related products, systems, and services. It markets air and gas handling products under the Howden brand name. This segment sells its products and services directly, as well as through independent representatives and distributors to customers in the power generation, oil, gas and petrochemical, mining, wastewater, general industrial, and other end markets. The Fabrication Technology segment formulates, develops, manufactures, and supplies consumable products and equipment for use in cutting, joining, and automated welding of steels, aluminum, and other metals and metal alloys. This segment also provides welding consumables comprising electrodes, cored and solid wires, and fluxes using a range of specialty and other materials; and cutting consumables, such as electrodes, nozzles, and shields and tips under the ESAB brand name. It sells its products through independent distributors and direct sales to the infrastructure, wind power, marine, pipelines, mobile/off-highway equipment, oil, gas, and mining markets. Colfax Corporation was founded in 1860 and is headquartered in Annapolis Junction, Maryland.
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