Preformed Line Products (NASDAQ:PLPC – Get Free Report) and Emerson Electric (NYSE:EMR – Get Free Report) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.
Valuation and Earnings
This table compares Preformed Line Products and Emerson Electric”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Preformed Line Products | $669.34 million | 3.09 | $35.28 million | $8.88 | 47.70 |
| Emerson Electric | $18.02 billion | 4.73 | $2.29 billion | $4.57 | 33.28 |
Dividends
Preformed Line Products pays an annual dividend of $0.84 per share and has a dividend yield of 0.2%. Emerson Electric pays an annual dividend of $2.22 per share and has a dividend yield of 1.5%. Preformed Line Products pays out 9.5% of its earnings in the form of a dividend. Emerson Electric pays out 48.6% 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. Emerson Electric has raised its dividend for 68 consecutive years. Emerson Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Preformed Line Products and Emerson Electric’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Preformed Line Products | 5.82% | 10.64% | 7.65% |
| Emerson Electric | 13.83% | 17.58% | 8.50% |
Volatility and Risk
Preformed Line Products has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Emerson Electric has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.
Insider and Institutional Ownership
41.2% of Preformed Line Products shares are held by institutional investors. Comparatively, 74.3% of Emerson Electric shares are held by institutional investors. 33.0% of Preformed Line Products shares are held by company insiders. Comparatively, 0.2% of Emerson Electric shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a summary of recent recommendations and price targets for Preformed Line Products and Emerson Electric, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Preformed Line Products | 0 | 0 | 1 | 1 | 3.50 |
| Emerson Electric | 1 | 10 | 13 | 0 | 2.50 |
Preformed Line Products presently has a consensus price target of $275.00, suggesting a potential downside of 35.07%. Emerson Electric has a consensus price target of $167.83, suggesting a potential upside of 10.36%. Given Emerson Electric’s higher possible upside, analysts plainly believe Emerson Electric is more favorable than Preformed Line Products.
Summary
Emerson Electric beats Preformed Line Products on 12 of the 18 factors compared between the two stocks.
About Preformed Line Products
Preformed Line Products Company, together with its subsidiaries, designs and manufactures products and systems that are used in the construction and maintenance of overhead, ground-mounted, and underground networks for the energy, telecommunication, cable, data communication, and other industries. The company offers optical ground wire products to support, protect, terminate, and splice transmission and distribution lines, as well as bolted, welded, and compressed connectors for substations; and string hardware products, polymer insulators, wildlife protection, substation fittings, and motion control devices. It also provides rugged outside plant closures to protect and support wireline and wireless networks, such as copper cable or fiber optic cable from moisture, environmental hazards, and other contaminants; and hardware assemblies, pole line hardware, plastic products, cable dynamics/vibration solutions, interior/exterior connectors, tools, and urethane solutions that are used by energy, renewable energy, communications, cable, and special industries for various applications. The company serves public and private energy utilities and communication companies, cable operators, governmental agencies, contractors and subcontractors, distributors, and value-added resellers in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. It markets its products through a direct sales force, as well as through manufacturing representatives. Preformed Line Products Company was incorporated in 1947 and is headquartered in Mayfield Village, Ohio.
About Emerson Electric
Emerson Electric Co., a technology and software company, provides various solutions for customers in industrial, commercial, and consumer markets in the Americas, Asia, the Middle East, Africa, and Europe. It operates in six segments: Final Control, Control Systems & Software, Measurement & Analytical, AspenTech, Discrete Automation, and Safety & Productivity. The Final Control segment provides control, isolation, shutoff, pressure relief, and pressure safety valves, actuators, and regulators for process and hybrid industries. The Measurement & Analytical segment offers intelligent instrumentation measuring the physical properties of liquids or gases, such as pressure, temperature, level, flow, acoustics, corrosion, pH, conductivity, water quality, toxic gases, and flame. The Discrete Automation segment offers solenoid and pneumatic valves, valve position indicators, pneumatic cylinders, air preparation equipment, pressure and temperature switches, electric linear motion solutions, programmable automation control systems, electrical distribution equipment, and materials joining solutions. The Safety & Productivity segment offers tools for professionals and homeowners; pipe-working tools, including pipe wrenches, pipe cutters, pipe threading and roll grooving equipment, battery hydraulic tools; electrical tools; and other professional tools. The Control Systems & Software segment provides distributed control systems, safety instrumented systems, SCADA systems, application software, digital twins, asset performance management, and cybersecurity. The Test & Measurement provides software-connected automated test and measurement systems. The AspenTech segment provides asset optimization software that enables industrial manufacturers to design, operate, and maintain operations for enhancing performance through a combination of decades of modeling, simulation, and optimization capabilities. The company was incorporated in 1890 and is headquartered in Saint Louis, Missouri.
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