Brady Corporation (NYSE: BRC) and Ritchie Bros. Auctioneers (NYSE:RBA) are both industrial products companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.
Insider & Institutional Ownership
76.1% of Brady Corporation shares are owned by institutional investors. Comparatively, 96.0% of Ritchie Bros. Auctioneers shares are owned by institutional investors. 15.6% of Brady Corporation shares are owned by insiders. Comparatively, 0.4% of Ritchie Bros. Auctioneers shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Brady Corporation pays an annual dividend of $0.82 per share and has a dividend yield of 2.2%. Ritchie Bros. Auctioneers pays an annual dividend of $0.68 per share and has a dividend yield of 2.2%. Brady Corporation pays out 44.6% of its earnings in the form of a dividend. Ritchie Bros. Auctioneers pays out 144.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Brady Corporation has increased its dividend for 14 consecutive years and Ritchie Bros. Auctioneers has increased its dividend for 31 consecutive years. Brady Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of recent recommendations and price targets for Brady Corporation and Ritchie Bros. Auctioneers, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ritchie Bros. Auctioneers||2||5||4||0||2.18|
Brady Corporation currently has a consensus price target of $38.33, indicating a potential upside of 4.45%. Ritchie Bros. Auctioneers has a consensus price target of $31.90, indicating a potential upside of 4.52%. Given Ritchie Bros. Auctioneers’ stronger consensus rating and higher possible upside, analysts clearly believe Ritchie Bros. Auctioneers is more favorable than Brady Corporation.
Valuation & Earnings
This table compares Brady Corporation and Ritchie Bros. Auctioneers’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Brady Corporation||$1.11 billion||1.70||$156.45 million||$1.84||19.95|
|Ritchie Bros. Auctioneers||$566.33 million||5.77||$203.46 million||$0.47||64.94|
Ritchie Bros. Auctioneers has higher revenue, but lower earnings than Brady Corporation. Brady Corporation is trading at a lower price-to-earnings ratio than Ritchie Bros. Auctioneers, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Brady Corporation has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Ritchie Bros. Auctioneers has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.
This table compares Brady Corporation and Ritchie Bros. Auctioneers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ritchie Bros. Auctioneers||8.96%||14.72%||6.14%|
Ritchie Bros. Auctioneers beats Brady Corporation on 10 of the 17 factors compared between the two stocks.
Brady Corporation Company Profile
Brady Corporation is a manufacturer and supplier of identification solutions and workplace safety products that identify and protect premises, products and people. The Company has two segments: Identification Solutions (IDS) and Workplace Safety (WPS). The IDS segment includes identification and healthcare products, and the WPS segment includes workplace safety and compliance products. The IDS segment offers products that are manufactured under various brands, including the Brady brand, and are primarily sold through distribution to a range of maintenance, repair and operations (MRO) and original equipment manufacturing (OEM) customers, and through other channels. The WPS segment offers a range of product categories, such as safety and compliance signs, tags, and labels; informational and architectural signage; industrial warehouse and office equipment, and labor law compliance posters. Its brands include Electromark, Identicard, PromoVision, Scafftag, Seton and Emedco.
Ritchie Bros. Auctioneers Company Profile
Ritchie Bros Auctioneers Inc is a Canada-based holding company. The Company is an industrial auctioneer and used equipment distributor, selling used equipment and other assets. Its segments include Core Auction, which is a network of auction locations that conduct live, unreserved auctions with both on-site and online bidding, and Other, which includes its EquipmentOne and Mascus International Holding B.V. (Mascus) online services. EquipmentOne is an online marketplace that equipment sellers can navigate independently. EquipmentOne facilitates the completion of sales through a settlement process managed by EquipmentOne that protects both the seller and the buyer. Mascus is an online equipment listing service for used heavy machinery and trucks. It offers subscriptions to equipment dealers, brokers, exporters and equipment manufacturers to list equipment available for sale at a listed price. The Company, through Mascus, provides online advertising services, business tools and solutions.
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