ITT (NYSE:ITT – Get Free Report) and ESAB (NYSE:ESAB – Get Free Report) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.
Analyst Ratings
This is a summary of recent ratings for ITT and ESAB, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ITT | 0 | 1 | 8 | 0 | 2.89 |
| ESAB | 0 | 1 | 6 | 0 | 2.86 |
ITT currently has a consensus target price of $260.22, suggesting a potential upside of 31.07%. ESAB has a consensus target price of $118.67, suggesting a potential upside of 70.62%. Given ESAB’s higher possible upside, analysts plainly believe ESAB is more favorable than ITT.
Profitability
This table compares ITT and ESAB’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ITT | 8.90% | 15.90% | 7.74% |
| ESAB | 5.75% | 14.48% | 5.99% |
Risk and Volatility
ITT has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, ESAB has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.
Institutional and Insider Ownership
91.6% of ITT shares are owned by institutional investors. Comparatively, 91.1% of ESAB shares are owned by institutional investors. 0.9% of ITT shares are owned by company insiders. Comparatively, 7.2% of ESAB shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares ITT and ESAB”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ITT | $3.94 billion | 4.51 | $488.00 million | $5.10 | 38.93 |
| ESAB | $2.84 billion | 1.52 | $226.77 million | $2.79 | 24.93 |
ITT has higher revenue and earnings than ESAB. ESAB is trading at a lower price-to-earnings ratio than ITT, indicating that it is currently the more affordable of the two stocks.
Dividends
ITT pays an annual dividend of $1.54 per share and has a dividend yield of 0.8%. ESAB pays an annual dividend of $0.48 per share and has a dividend yield of 0.7%. ITT pays out 30.2% of its earnings in the form of a dividend. ESAB pays out 17.2% 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. ITT has raised its dividend for 10 consecutive years and ESAB has raised its dividend for 3 consecutive years. ITT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
ITT beats ESAB on 14 of the 17 factors compared between the two stocks.
About ITT
ITT Inc., together with its subsidiaries, manufactures and sells engineered critical components and customized technology solutions for the transportation, industrial, and energy markets in the United States and internationally. The Motion Technologies segment manufactures brake pads, shims, shock absorbers, and energy absorption components; and sealing technologies primarily for the transportation industry, including passenger cars, trucks, light- and heavy-duty commercial and military vehicles, buses, and trains. This segment sells its products under ITT Friction Technologies, KONI, Wolverine Advanced Materials, Axtone, Novitek, and GALT. brand names. The Industrial Process segment provides industrial pumps, valves, and plant optimization and remote monitoring systems and services; and aftermarket solutions, such as replacement parts and services. It serves various customers in industries, such as chemical, energy, mining, and other industrial process markets. This segment sells its products under Goulds Pumps, Bornemann, Engineered Valves, PRO Services, C'treat, i-ALERT, Rheinhütte Pumpen, and Habonim brand names. The Connect & Control Technologies segment designs and manufactures a range of engineered connectors and specialized products for critical applications supporting various markets, including aerospace and defense, industrial, transportation, medical, and energy. This segment provides connector products, such as circular, rectangular, radio frequency, fiber optic, D-sub miniature, micro-miniature, and cable assemblies; and control products consist of highly engineered actuation, flow control, energy absorption, environmental control, and composite component solutions for the aerospace, defense, and industrial markets under Cannon, VEAM, BIW Connector Systems, Aerospace Controls, Enidine, Compact Automation, Neo-Dyn Process Controls, Conoflow, and Micro-Mode brand names. The company was incorporated in 1920 and is headquartered in Stamford, Connecticut.
About ESAB
ESAB Corporation engages in the formulation, development, manufacture, and supply of consumable products and equipment for use in cutting, joining, automated welding, and gas control equipment. Its comprehensive range of welding consumables includes electrodes, cored and solid wires, and fluxes using a range of specialty and other materials; and cutting consumables comprising electrodes, nozzles, shields, and tips. The company's equipment ranges from portable welding machines to large customized automated cutting and welding systems. It also offers a range of software and digital solutions to help its customers increase their productivity, remotely monitor their welding operations, and digitize their documentation. The company sells its products under the ESAB brand to various end markets, such as general industry, infrastructure, renewable energy, medical and life sciences, transportation, construction, and energy. It offers its products through independent distributors and direct salespeople. The company operates in North America, South America, Europe, the Middle East, India, Africa, and the Asia Pacific. ESAB Corporation was founded in 1904 and is headquartered in North Bethesda, Maryland.
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