Critical Review: Franklin Electric (FELE) versus The Competition

Franklin Electric (NASDAQ:FELE) is one of 23 public companies in the “MACH – ELECTRICAL” industry, but how does it weigh in compared to its competitors? We will compare Franklin Electric to related businesses based on the strength of its dividends, institutional ownership, profitability, earnings, risk, valuation and analyst recommendations.

Volatility & Risk

Franklin Electric has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500. Comparatively, Franklin Electric’s competitors have a beta of 1.31, meaning that their average stock price is 31% more volatile than the S&P 500.

Earnings & Valuation

This table compares Franklin Electric and its competitors revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Franklin Electric	$2.13 billion	$147.09 million	28.07
Franklin Electric Competitors	$8.33 billion	$806.58 million	18.04

Franklin Electric’s competitors have higher revenue and earnings than Franklin Electric. Franklin Electric is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Insider and Institutional Ownership

80.0% of Franklin Electric shares are held by institutional investors. Comparatively, 59.8% of shares of all “MACH – ELECTRICAL” companies are held by institutional investors. 2.7% of Franklin Electric shares are held by insiders. Comparatively, 3.5% of shares of all “MACH – ELECTRICAL” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Franklin Electric and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Electric	0	3	0	0	2.00
Franklin Electric Competitors	303	1209	1634	85	2.46

Franklin Electric presently has a consensus price target of $106.00, suggesting a potential upside of 17.29%. As a group, “MACH – ELECTRICAL” companies have a potential downside of 2.17%. Given Franklin Electric’s higher possible upside, equities research analysts plainly believe Franklin Electric is more favorable than its competitors.

Dividends

Franklin Electric pays an annual dividend of $1.12 per share and has a dividend yield of 1.2%. Franklin Electric pays out 34.8% of its earnings in the form of a dividend. As a group, “MACH – ELECTRICAL” companies pay a dividend yield of 0.7% and pay out 18.9% of their earnings in the form of a dividend. Franklin Electric has raised its dividend for 33 consecutive years.

Profitability

This table compares Franklin Electric and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Electric	6.90%	14.52%	9.59%
Franklin Electric Competitors	-1,637.81%	-1.51%	-4.83%

Summary

Franklin Electric competitors beat Franklin Electric on 8 of the 15 factors compared.

Franklin Electric Company Profile

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.