Eastern (NASDAQ:EML – Get Free Report) and Parker-Hannifin (NYSE:PH – Get Free Report) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.
Profitability
This table compares Eastern and Parker-Hannifin’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Eastern | 3.44% | 3.38% | 1.89% |
| Parker-Hannifin | 16.97% | 28.48% | 13.49% |
Analyst Recommendations
This is a breakdown of recent ratings and price targets for Eastern and Parker-Hannifin, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Eastern | 0 | 2 | 0 | 0 | 2.00 |
| Parker-Hannifin | 0 | 3 | 16 | 0 | 2.84 |
Valuation & Earnings
This table compares Eastern and Parker-Hannifin”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Eastern | $234.37 million | 0.63 | $7.13 million | $1.34 | 18.37 |
| Parker-Hannifin | $21.50 billion | 5.71 | $3.65 billion | $28.49 | 34.17 |
Parker-Hannifin has higher revenue and earnings than Eastern. Eastern is trading at a lower price-to-earnings ratio than Parker-Hannifin, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Eastern has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Parker-Hannifin has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.
Dividends
Eastern pays an annual dividend of $0.44 per share and has a dividend yield of 1.8%. Parker-Hannifin pays an annual dividend of $8.00 per share and has a dividend yield of 0.8%. Eastern pays out 32.8% of its earnings in the form of a dividend. Parker-Hannifin pays out 28.1% 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. Parker-Hannifin has raised its dividend for 70 consecutive years.
Insider and Institutional Ownership
77.0% of Eastern shares are owned by institutional investors. Comparatively, 82.4% of Parker-Hannifin shares are owned by institutional investors. 18.4% of Eastern shares are owned by insiders. Comparatively, 0.3% of Parker-Hannifin shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Summary
Parker-Hannifin beats Eastern on 15 of the 17 factors compared between the two stocks.
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.
About Parker-Hannifin
Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. The company operates through two segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial segment offers sealing, shielding, thermal products and systems, adhesives, coatings, and noise vibration and harshness solutions; filters, systems, and diagnostics solutions to ensure purity and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors used in fluid and gas handling; and hydraulic, pneumatic, and electromechanical components and systems for builders and users of mobile and industrial machinery and equipment. This segment sells its products to original equipment manufacturers (OEMs) and distributors who serve the replacement markets in manufacturing, packaging, processing, transportation, construction, refrigeration and air conditioning, agricultural, and military machinery and equipment industries. The Aerospace Systems segment offers products for use in commercial and military airframe and engine programs, such as control actuation systems and components, engine build-up ducting, engine exhaust nozzles and assemblies, engine systems and components, fluid conveyance systems and components, fuel systems and components, fuel tank inerting systems, hydraulic systems and components, lubrication components, avionics, sensors, pneumatic control components, thermal management products, fire detection and suppression systems and components, and wheels and brakes, as well as fluid metering, delivery, and atomization devices. This segment markets its products directly to OEMs and end users. The company markets its products through direct-sales employees, independent distributors, and sales representatives. Parker-Hannifin Corporation was founded in 1917 and is headquartered in Cleveland, Ohio.
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