Acuity (NYSE:AYI) and Sensata Technologies (NYSE:ST) Head to Head Analysis

Acuity (NYSE:AYI) and Sensata Technologies (NYSE:ST) are both mid-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.

Earnings & Valuation

This table compares Acuity and Sensata Technologies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Acuity	$4.61 billion	2.07	$396.60 million	$15.08	21.11
Sensata Technologies	$3.78 billion	1.63	$31.30 million	$0.60	70.36

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

Institutional & Insider Ownership

98.2% of Acuity shares are held by institutional investors. Comparatively, 99.4% of Sensata Technologies shares are held by institutional investors. 2.9% of Acuity shares are held by company insiders. Comparatively, 0.7% of Sensata Technologies shares are held by company 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.

Dividends

Acuity pays an annual dividend of $0.80 per share and has a dividend yield of 0.3%. Sensata Technologies pays an annual dividend of $0.48 per share and has a dividend yield of 1.1%. Acuity pays out 5.3% of its earnings in the form of a dividend. Sensata Technologies pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Acuity has increased its dividend for 3 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations for Acuity and Sensata Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acuity	0	4	5	0	2.56
Sensata Technologies	1	5	4	0	2.30

Acuity presently has a consensus target price of $397.17, suggesting a potential upside of 24.77%. Sensata Technologies has a consensus target price of $49.10, suggesting a potential upside of 16.31%. Given Acuity’s stronger consensus rating and higher possible upside, analysts clearly believe Acuity is more favorable than Sensata Technologies.

Volatility and Risk

Acuity has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, Sensata Technologies has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.

Profitability

This table compares Acuity and Sensata Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Acuity	10.25%	20.26%	12.21%
Sensata Technologies	2.37%	18.68%	7.77%

Summary

Acuity beats Sensata Technologies on 14 of the 17 factors compared between the two stocks.

About Acuity

Acuity Brands, Inc. provides lighting, lighting controls, building management system, location-aware applications in the United States and internationally. The company operates in two segments, Acuity Brands Lighting and Lighting Controls (ABL); and the Intelligent Spaces Group (ISG). The ABL segment provides commercial, architectural, and specialty lighting solutions, as well as lighting controls and components for various indoor and outdoor applications under the A-Light, Aculux, American Electric Lighting, Cyclone, Dark to Light, eldoLED, Eureka, Gotham, Healthcare Lighting, Holophane, Hydrel, Indy, IOTA, Juno, Lithonia Lighting, Luminaire LED, Luminis, Mark Architectural Lighting, nLight, OPTOTRONIC, Peerless, RELOCWiring Solutions, and Sensor Switch. This segment serves electrical distributors, retail home improvement centers, electric utilities, national accounts, original equipment manufacturers, digital retailers, lighting showrooms, and energy service companies. The ISG segment offers building management solutions, such as products for controlling heating, ventilation, air conditioning, lighting, shades, refrigeration, and building access that deliver end-to-end optimization of those building systems; and building management software that enhances building system management and automates labor intensive tasks. This segment serves system integrators, as well as retail stores, airports, and enterprise campuses. The company offers its products and solutions under the Atrius, Distech Controls, and KE2 Therm Solutions brands. Acuity Brands, Inc. was incorporated in 2001 and is headquartered in Atlanta, Georgia.

About Sensata Technologies

Sensata Technologies Holding plc develops, manufactures, and sells sensors and sensor-rich solutions, electrical protection components and systems, and other products used in mission-critical systems and applications in the United States and internationally. It operates in two segments, Performance Sensing and Sensing Solutions. The Performance Sensing segment offers pressure, temperature, and position sensors, high-voltage solutions, and other solutions used in mission-critical systems and applications, such as tire pressure monitoring, thermal management, electrical protection, regenerative braking, powertrain for engine/transmission, and exhaust management for automobiles, on-road trucks, and off-road equipment customers. The Sensing Solutions segment provides application-specific sensor and electrical protection products, such as pressure, temperature, and position sensors; motor and compressor protectors; high-voltage contactors; solid state relays; bimetal electromechanical controls; power inverters; charge controllers; battery management systems; operator controls; and power conversion systems. It serves automotive, on-road truck, construction, and original equipment manufacturers in agriculture, control, appliance, medical, energy and charging infrastructure, data/telecom, and aerospace and defense industries, as well as systems integrators, aerospace, and motor and compressor distributors. Sensata Technologies Holding plc was founded in 1916 and is headquartered in Attleboro, Massachusetts.