Atlas Copco (OTCMKTS:ATLKY – Get Free Report) and Eastern (NASDAQ:EML – Get Free Report) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.
Profitability
This table compares Atlas Copco and Eastern’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Atlas Copco | 15.66% | 24.10% | 12.77% |
| Eastern | 3.44% | 3.38% | 1.89% |
Analyst Ratings
This is a breakdown of current recommendations and price targets for Atlas Copco and Eastern, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Atlas Copco | 2 | 2 | 5 | 1 | 2.50 |
| Eastern | 0 | 2 | 0 | 0 | 2.00 |
Valuation and Earnings
This table compares Atlas Copco and Eastern”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Atlas Copco | $17.21 billion | 5.74 | $2.70 billion | $0.57 | 35.58 |
| Eastern | $248.97 million | 0.59 | $7.13 million | $1.34 | 18.14 |
Atlas Copco has higher revenue and earnings than Eastern. Eastern is trading at a lower price-to-earnings ratio than Atlas Copco, indicating that it is currently the more affordable of the two stocks.
Dividends
Atlas Copco pays an annual dividend of $0.35 per share and has a dividend yield of 1.7%. Eastern pays an annual dividend of $0.44 per share and has a dividend yield of 1.8%. Atlas Copco pays out 61.4% of its earnings in the form of a dividend. Eastern pays out 32.8% 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. Eastern is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
0.0% of Atlas Copco shares are owned by institutional investors. Comparatively, 77.0% of Eastern shares are owned by institutional investors. 18.4% of Eastern shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Volatility & Risk
Atlas Copco has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500. Comparatively, Eastern has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.
Summary
Atlas Copco beats Eastern on 11 of the 16 factors compared between the two stocks.
About Atlas Copco
Atlas Copco AB provides compressed air and gas, vacuum, energy, dewatering and industrial pump, industrial power tool, and assembly and machine vision solutions in North America, South America, Europe, Africa, the Middle East, Asia, and Oceania. It operates through Compressor Technique, Vacuum Technique, Industrial Technique, and Power Technique segments. The company offers piston compressors, oil-free tooth and scroll compressors, rotary screw compressors, oil-free blowers, oil-free centrifugal compressors, gas and process compressors, air and gas treatment equipment, expanders and pumps, and medical air solutions. It also provides oil-sealed rotary vane, dry, and liquid ring vacuum pumps; turbomolecular and cryogenic pumps; abatement and integrated systems; industrial assembly tools and solutions; self-pierce riveting solutions; adhesive dispensing and flow drill fastening equipment; material removal tools, and drills and other pneumatic products; machine vision solutions; construction and demolition tools; mobile compressors, generators, and energy storage systems; and industrial flow, portable power, portable flow, and portable air products, as well as specialty rental services. The company serves the semiconductor and flat panel, industrial manufacturing, civil engineering, demolition, exploration drilling, automotive, off-highway vehicles, electronics, aerospace, energy, food, pharmaceutical, textile, and other industries. Atlas Copco AB was founded in 1873 and is headquartered in Nacka, Sweden.
About Eastern
The Eastern Company designs, manufactures, and sells engineered solutions to industrial markets in the United States and internationally. The company offers turnkey returnable packaging solutions, which are used in the assembly processes of vehicles, aircraft, and durable goods, as well as in production processes of plastic packaging products, packaged consumer goods, and pharmaceuticals; designs and manufactures blow mold tools and injection blow mold tooling products, and 2-step stretch blow molds and related components for the stretch blow molding industry; and supplies blow molds and change parts to the food, beverage, healthcare, and chemical industries. It also provides rotary latches, compression latches, draw latches, hinges, camlocks, key switches, padlocks, and handles; and development and program management services for custom electromechanical and mechanical systems for original equipment manufacturers (OEMs) and customer applications. In addition, the company designs and manufactures proprietary vision technology for OEMs and aftermarket applications, as well as offers aftermarket components to the heavy- and medium-duty truck, motorhome, and bus markets. The Eastern Company was founded in 1858 and is based in Shelton, Connecticut.
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