Head to Head Review: Valmont Industries (NYSE:VMI) versus Otis Worldwide (NYSE:OTIS)

Otis Worldwide (NYSE:OTIS) and Valmont Industries (NYSE:VMI) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations and price targets for Otis Worldwide and Valmont Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Otis Worldwide	1	5	4	0	2.30
Valmont Industries	0	2	4	0	2.67

Otis Worldwide currently has a consensus target price of $92.91, suggesting a potential upside of 35.36%. Valmont Industries has a consensus target price of $587.00, suggesting a potential upside of 24.23%. Given Otis Worldwide’s higher probable upside, equities research analysts plainly believe Otis Worldwide is more favorable than Valmont Industries.

Profitability

This table compares Otis Worldwide and Valmont Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Otis Worldwide	10.17%	-28.50%	14.39%
Valmont Industries	11.70%	25.57%	12.44%

Insider & Institutional Ownership

88.0% of Otis Worldwide shares are held by institutional investors. Comparatively, 87.8% of Valmont Industries shares are held by institutional investors. 0.1% of Otis Worldwide shares are held by insiders. Comparatively, 1.4% of Valmont Industries shares are held 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.

Earnings & Valuation

This table compares Otis Worldwide and Valmont Industries”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Otis Worldwide	$14.43 billion	1.81	$1.38 billion	$3.89	17.65
Valmont Industries	$4.10 billion	2.22	$334.78 million	$25.68	18.40

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

Volatility and Risk

Otis Worldwide has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, Valmont Industries has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Dividends

Otis Worldwide pays an annual dividend of $1.76 per share and has a dividend yield of 2.6%. Valmont Industries pays an annual dividend of $3.08 per share and has a dividend yield of 0.7%. Otis Worldwide pays out 45.2% of its earnings in the form of a dividend. Valmont Industries pays out 12.0% 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. Otis Worldwide has increased its dividend for 5 consecutive years and Valmont Industries has increased its dividend for 1 consecutive years. Otis Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Valmont Industries beats Otis Worldwide on 9 of the 16 factors compared between the two stocks.

About Otis Worldwide

Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. This segment serves real-estate and building developers, and general contractors. It sells its products directly to customers, as well as through agents and distributors. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. Otis Worldwide Corporation was founded in 1853 and is headquartered in Farmington, Connecticut.

About Valmont Industries

Valmont Industries, Inc. operates as manufacturer of products and services for infrastructure and agriculture markets in the United States, Australia, Brazil, and internationally. It operates through two segments, Infrastructure and Agriculture. The company manufactures and distributes steel, pre-stressed concrete, composite structures for electrical transmission, substation, and distribution applications; and designs, engineers, and manufactures metal, steel, wood, aluminum, and composite poles and structures for lighting and transportation applications. It also offers galvanizing, anodizing, painting, and powder coating services for paint products; towers, small cell structures, camouflage concealment solutions, passive intermodulation mitigation equipment, and components for wireless communication markets; and solar single-axis tracker product, an integrated system of steel structures, electric motors, and electronic controllers, as well as provides coatings services to preserve metal products. In addition, the company manufactures center pivot components and linear irrigation equipment for the agricultural markets, such as parts and tubular products for industrial customers; advanced technology solutions for agricultural sector; mechanical irrigation equipment and service parts under the Valley brand name. It serves municipalities and government entities, commercial lighting fixtures manufacturing companies, contractors, telecommunications and utility companies, and farmers, as well as the general manufacturing sector. Valmont Industries, Inc. was founded in 1946 and is headquartered in Omaha, Nebraska.