Regal Rexnord (NYSE:RRX – Get Free Report) and Otis Worldwide (NYSE:OTIS – Get Free Report) are both large-cap industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.
Volatility & Risk
Regal Rexnord has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Otis Worldwide has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.
Earnings & Valuation
This table compares Regal Rexnord and Otis Worldwide”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Regal Rexnord | $5.93 billion | 2.26 | $279.50 million | $4.30 | 46.85 |
| Otis Worldwide | $14.43 billion | 1.89 | $1.38 billion | $3.76 | 18.86 |
Otis Worldwide has higher revenue and earnings than Regal Rexnord. Otis Worldwide is trading at a lower price-to-earnings ratio than Regal Rexnord, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings and target prices for Regal Rexnord and Otis Worldwide, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Regal Rexnord | 0 | 3 | 6 | 0 | 2.67 |
| Otis Worldwide | 1 | 7 | 3 | 0 | 2.18 |
Regal Rexnord presently has a consensus target price of $232.25, indicating a potential upside of 15.28%. Otis Worldwide has a consensus target price of $97.64, indicating a potential upside of 37.67%. Given Otis Worldwide’s higher possible upside, analysts plainly believe Otis Worldwide is more favorable than Regal Rexnord.
Dividends
Regal Rexnord pays an annual dividend of $1.40 per share and has a dividend yield of 0.7%. Otis Worldwide pays an annual dividend of $1.76 per share and has a dividend yield of 2.5%. Regal Rexnord pays out 32.6% of its earnings in the form of a dividend. Otis Worldwide pays out 46.8% 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. Otis Worldwide has increased its dividend for 5 consecutive years. Otis Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
99.7% of Regal Rexnord shares are held by institutional investors. Comparatively, 88.0% of Otis Worldwide shares are held by institutional investors. 0.6% of Regal Rexnord shares are held by insiders. Comparatively, 0.1% of Otis Worldwide shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Regal Rexnord and Otis Worldwide’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Regal Rexnord | 4.78% | 9.49% | 4.65% |
| Otis Worldwide | 10.11% | -29.39% | 14.86% |
Summary
Regal Rexnord beats Otis Worldwide on 10 of the 17 factors compared between the two stocks.
About Regal Rexnord
Regal Rexnord Corporation manufactures and sells industrial powertrain solutions, power transmission components, electric motors and electronic controls, air moving products, and specialty electrical components and systems worldwide. The Industrial Powertrain Solutions segment provides mounted and unmounted bearings, couplings, mechanical power transmission drives and components, gearboxes, gear motors, clutches, brakes, special, and industrial powertrain components and solutions for food and beverage, bulk material handling, eCommerce/warehouse distribution, energy, mining, marine, agricultural machinery, turf and garden, and general industrial markets. The Power Efficiency Solutions segment offers AC and DC motors, electronic variable speed controls, and blowers for residential, commercial HVAC, water heaters, commercial refrigeration, commercial building ventilation, pool and spa, irrigation, agriculture, conveying, and general commercial equipment markets. The Automation and Motion Control segment provides conveyor products, conveying automation subsystems, aerospace components, rotary precision motion solutions, high-efficiency miniature motors, motion controls, automation transfer switches, and switchgear for industrial applications and automation systems for material handling, aerospace and defense, factory automation, data centers, medical device, packaging, printing, semiconductor, robotic, industrial power tool, mobile off-highway, food and beverage processing, and other applications. The Industrial Systems segment offers integral motors, alternators, and aftermarket parts and kits for agriculture, marine, mining, oil and gas, food and beverage, data centers, prime and standby power, and general industrial equipment markets. It sells its products directly to original equipment manufacturers, distributors, and end-users. The company was formerly known as Regal Beloit Corporation. The company was founded in 1955 and is based in Milwaukee, Wisconsin.
About Otis Worldwide
Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. This segment serves real-estate and building developers, and general contractors. It sells its products directly to customers, as well as through agents and distributors. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. Otis Worldwide Corporation was founded in 1853 and is headquartered in Farmington, Connecticut.
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