Wartsila (OTCMKTS:WRTBY) and ITT (NYSE:ITT) Financial Analysis

ITT (NYSE:ITT) and Wartsila (OTCMKTS:WRTBY) are both large-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Profitability

This table compares ITT and Wartsila’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%
Wartsila	9.12%	25.16%	7.81%

Insider & Institutional Ownership

91.6% of ITT shares are held by institutional investors. 0.9% of ITT shares are held 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.

Earnings and Valuation

This table compares ITT and Wartsila”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
Wartsila	$7.82 billion	2.15	$708.26 million	$0.24	23.67

Wartsila has higher revenue and earnings than ITT. Wartsila is trading at a lower price-to-earnings ratio than ITT, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for ITT and Wartsila, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ITT	0	1	8	0	2.89
Wartsila	3	2	2	0	1.86

ITT currently has a consensus target price of $260.22, indicating a potential upside of 31.07%. Given ITT’s stronger consensus rating and higher possible upside, analysts plainly believe ITT is more favorable than Wartsila.

Dividends

ITT pays an annual dividend of $1.54 per share and has a dividend yield of 0.8%. Wartsila pays an annual dividend of $0.04 per share and has a dividend yield of 0.7%. ITT pays out 30.2% of its earnings in the form of a dividend. Wartsila pays out 16.7% 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. ITT has increased its dividend for 10 consecutive years. ITT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

ITT has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, Wartsila has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Summary

ITT beats Wartsila on 11 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 Wartsila

Wärtsilä Oyj Abp offers technologies and lifecycle solutions for the marine and energy markets worldwide. It offers engine power plant products, such as gas, multi-fuel, and diesel engines; GEMS Digital Energy Platform, a smart software platform that monitors, controls, and optimizes energy assets on site and portfolio levels; GridSolv Quantum, a fully integrated energy storage solution, which enables ease of deployment and sustainable energy optimization; GEMS Power Plant Controllers; GEMS Fleet Director, which provides centralized real-time visibility into a global fleet of power plants; and GEMS Grid Controller that conducts intelligent grid control and optimized power management for microgrids of various sizes. The company also provides GEMS smart energy management software platform to remotely monitor, operate, identify, and diagnose assets; lifecycle solutions for power plants; power and propulsion products, such as electric shipping and hybrid ships, engine and generating sets, propulsors and gears, and shaft line solutions; liquid and gas handling products, including ballast water management, freshwater generation, waste and wastewater treatment, gas solutions, and exhaust treatment equipment; port and fleet optimization; simulation and training solutions; and automation, navigation, and control systems. The company was founded in 1834 and is headquartered in Helsinki, Finland.