Twin Disc (NASDAQ:TWIN – Get Free Report) and AB SKF (OTCMKTS:SKFRY – Get Free Report) are both industrials companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, analyst recommendations, profitability, institutional ownership, dividends and valuation.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Twin Disc and AB SKF, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Twin Disc | 0 | 1 | 2 | 0 | 2.67 |
| AB SKF | 1 | 4 | 1 | 0 | 2.00 |
Twin Disc presently has a consensus target price of $30.00, indicating a potential upside of 22.60%. Given Twin Disc’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Twin Disc is more favorable than AB SKF.
Insider and Institutional Ownership
65.2% of Twin Disc shares are owned by institutional investors. Comparatively, 0.1% of AB SKF shares are owned by institutional investors. 21.1% of Twin Disc shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Volatility & Risk
Twin Disc has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, AB SKF has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.
Valuation and Earnings
This table compares Twin Disc and AB SKF”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Twin Disc | $381.27 million | 0.93 | $27.08 million | $2.38 | 10.28 |
| AB SKF | $9.36 billion | 1.31 | $401.34 million | $1.06 | 25.50 |
AB SKF has higher revenue and earnings than Twin Disc. Twin Disc is trading at a lower price-to-earnings ratio than AB SKF, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Twin Disc and AB SKF’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Twin Disc | 9.06% | 6.78% | 3.31% |
| AB SKF | 5.05% | 13.27% | 6.91% |
Dividends
Twin Disc pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. AB SKF pays an annual dividend of $0.59 per share and has a dividend yield of 2.2%. Twin Disc pays out 8.4% of its earnings in the form of a dividend. AB SKF pays out 55.7% 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.
About Twin Disc
Twin Disc, Incorporated engages in the design, manufacture, and sale of marine and heavy duty off-highway power transmission equipment in the United States, the Netherlands, China, Australia, Italy, and internationally. The company operates in two segments, Manufacturing and Distribution. Its principal products include marine transmissions, azimuth drives, surface drives, propellers, and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches, and controls systems. The company also provides third-party manufactured products. It sells its products through a direct sales force and distributor network to customers primarily in the pleasure craft, commercial marine, patrol, and military marine markets, as well as in the energy and natural resources, government, agriculture, recycling, construction, oil and gas, and industrial markets. The company was incorporated in 1918 and is headquartered in Milwaukee, Wisconsin.
About AB SKF
AB SKF (publ) designs, manufactures, and sells bearings and units, seals, lubrication systems, condition monitoring, and services worldwide. It operates in two segments, Industrial and Automotive. The company offers rolling, mounted and housings, super-precision, slewing, plain, magnetic, and thin section bearings; industrial and automotive seals; lubricants, manual lubrication tools, lubricators, automatic lubrication systems, and lubrication system components; maintenance products, such as hydraulic, mechanical, and alignment tools, as well as heaters; belts, pulleys, chains, sprockets, bushings and hubs, couplings, and bolts and tightening systems; condition monitoring systems; test and measuring equipment, such as waviness and roundness analyzers, noise and vibration testers, and grease test rigs, as well as calibration with traceability, machine training and support, and upgrades and refurbishment services; and vehicle aftermarket products. It also provides application engineering services consisting of technical consultancy, numerical simulation and design, and root cause analysis; asset management services, such as assessment and benchmarking, maintenance strategy review, spare parts and inventory management, and lubrication management; condition-based maintenance, including vibration analysis and diagnostics, thermography, lubrication analysis, and condition monitoring system installation; mechanical maintenance comprising mounting and dismounting, precision alignment, and balancing; remanufacturing and customization; and training solutions, which include instructor-led training, e-learning courses, and webinar recordings. The company serves the aerospace, agriculture, automotive, construction, food and beverage, general machinery, machine tools, marine, material handling, metals, mining, mineral processing, ocean energy, pulp and paper, railways, and wind industries. AB SKF (publ) was incorporated in 1907 and is headquartered in Gothenburg, Sweden.
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