Critical Contrast: Vestas Wind Systems AS (OTCMKTS:VWDRY) & Franklin Electric (NASDAQ:FELE)

Vestas Wind Systems AS (OTCMKTS:VWDRY) and Franklin Electric (NASDAQ:FELE) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Valuation & Earnings

This table compares Vestas Wind Systems AS and Franklin Electric”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vestas Wind Systems AS	$18.72 billion	1.08	$539.97 million	$0.27	24.70
Franklin Electric	$2.02 billion	2.02	$180.31 million	$3.87	23.71

Vestas Wind Systems AS has higher revenue and earnings than Franklin Electric. Franklin Electric is trading at a lower price-to-earnings ratio than Vestas Wind Systems AS, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

80.0% of Franklin Electric shares are held by institutional investors. 2.7% of Franklin Electric shares are held by 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.

Dividends

Vestas Wind Systems AS pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Franklin Electric pays an annual dividend of $1.06 per share and has a dividend yield of 1.2%. Vestas Wind Systems AS pays out 7.4% of its earnings in the form of a dividend. Franklin Electric pays out 27.4% 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. Franklin Electric has raised its dividend for 33 consecutive years. Franklin Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations for Vestas Wind Systems AS and Franklin Electric, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vestas Wind Systems AS	1	2	1	1	2.40
Franklin Electric	0	2	0	0	2.00

Franklin Electric has a consensus target price of $107.00, suggesting a potential upside of 16.61%. Given Franklin Electric’s higher probable upside, analysts clearly believe Franklin Electric is more favorable than Vestas Wind Systems AS.

Profitability

This table compares Vestas Wind Systems AS and Franklin Electric’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vestas Wind Systems AS	4.08%	23.25%	3.06%
Franklin Electric	8.71%	14.05%	9.47%

Risk & Volatility

Vestas Wind Systems AS has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Franklin Electric has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

About Vestas Wind Systems AS

Vestas Wind Systems A/S engages in the design, manufacture, installation, and services of wind turbines the United States, Denmark, and internationally. It operates in two segments, Power Solutions and Service. The Power Solutions segment offers onshore and offshore wind power plants, wind turbines, development sites, etc. The Service segment engages in the sale of service contracts, spare parts, and related activities. Vestas Wind Systems A/S was founded in 1898 and is headquartered in Aarhus, Denmark.

About Franklin Electric

Franklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. The company operates through Water Systems, Fueling Systems, and Distribution segments. The Water Systems segment offers submersible motors, drives, pumps, electronic controls, water treatment systems, monitoring devices, and related parts and equipment. Its motors and pumps are used principally for pumping clean water and wastewater in various residential, agricultural, municipal, and industrial applications; and manufactures electronic drives and controls that are used in motors for controlling functionality, as well as provides protection from various hazards, such as electrical surges, over-heating, and dry wells or tanks. The Fueling Systems segment provides pumps, pipes, sumps, fittings, vapor recovery components, electronic controls, monitoring devices, and related parts and equipment primarily for use in fueling system applications. This segment serves other energy markets, such as power reliability systems, as well as includes electronic devices for online monitoring of the power utility, hydroelectric, and telecommunication and data center infrastructure. The Distribution segment sells to and provides presale support and specifications to the installing contractors. It sells products produced by the Water Systems segment. The company sells its products to wholesale and retail distributors, specialty distributors, original equipment manufacturers, industrial and petroleum equipment distributors, and oil and utility companies through its employee sales force and independent manufacturing representatives. Franklin Electric Co., Inc. was founded in 1944 and is headquartered in Fort Wayne, Indiana.