Critical Contrast: Regal Rexnord (RRX) and Its Peers

Regal Rexnord (NYSE:RRX) is one of 216 publicly-traded companies in the “Electrical Equipment” industry, but how does it contrast to its peers? We will compare Regal Rexnord to related companies based on the strength of its valuation, dividends, analyst recommendations, risk, earnings, institutional ownership and profitability.

Risk & Volatility

Regal Rexnord has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, Regal Rexnord’s peers have a beta of -20.44, suggesting that their average share price is 2,144% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Regal Rexnord and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regal Rexnord	0	3	8	0	2.73
Regal Rexnord Competitors	2285	5158	7209	437	2.38

Regal Rexnord presently has a consensus price target of $231.33, indicating a potential upside of 44.81%. As a group, “Electrical Equipment” companies have a potential upside of 55.57%. Given Regal Rexnord’s peers higher probable upside, analysts clearly believe Regal Rexnord has less favorable growth aspects than its peers.

Profitability

This table compares Regal Rexnord and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Regal Rexnord	3.77%	10.28%	5.13%
Regal Rexnord Competitors	-354.45%	-44.26%	-7.93%

Earnings & Valuation

This table compares Regal Rexnord and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Regal Rexnord	$5.93 billion	$279.50 million	32.94
Regal Rexnord Competitors	$2.41 billion	$141.14 million	20.47

Regal Rexnord has higher revenue and earnings than its peers. Regal Rexnord is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Insider & Institutional Ownership

99.7% of Regal Rexnord shares are owned by institutional investors. Comparatively, 37.4% of shares of all “Electrical Equipment” companies are owned by institutional investors. 0.6% of Regal Rexnord shares are owned by company insiders. Comparatively, 14.9% of shares of all “Electrical Equipment” companies are owned 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

Regal Rexnord pays an annual dividend of $1.40 per share and has a dividend yield of 0.9%. Regal Rexnord pays out 28.9% of its earnings in the form of a dividend. As a group, “Electrical Equipment” companies pay a dividend yield of 1.6% and pay out 27.1% of their earnings in the form of a dividend. Regal Rexnord lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Regal Rexnord beats its peers on 9 of the 15 factors compared.

About Regal Rexnord

Regal Rexnord Corporation manufactures and sells industrial powertrain solutions, power transmission components, electric motors and electronic controls, air moving products, and specialty electrical components and systems worldwide. The Industrial Powertrain Solutions segment provides mounted and unmounted bearings, couplings, mechanical power transmission drives and components, gearboxes, gear motors, clutches, brakes, special, and industrial powertrain components and solutions for food and beverage, bulk material handling, eCommerce/warehouse distribution, energy, mining, marine, agricultural machinery, turf and garden, and general industrial markets. The Power Efficiency Solutions segment offers AC and DC motors, electronic variable speed controls, and blowers for residential, commercial HVAC, water heaters, commercial refrigeration, commercial building ventilation, pool and spa, irrigation, agriculture, conveying, and general commercial equipment markets. The Automation and Motion Control segment provides conveyor products, conveying automation subsystems, aerospace components, rotary precision motion solutions, high-efficiency miniature motors, motion controls, automation transfer switches, and switchgear for industrial applications and automation systems for material handling, aerospace and defense, factory automation, data centers, medical device, packaging, printing, semiconductor, robotic, industrial power tool, mobile off-highway, food and beverage processing, and other applications. The Industrial Systems segment offers integral motors, alternators, and aftermarket parts and kits for agriculture, marine, mining, oil and gas, food and beverage, data centers, prime and standby power, and general industrial equipment markets. It sells its products directly to original equipment manufacturers, distributors, and end-users. The company was formerly known as Regal Beloit Corporation. The company was founded in 1955 and is based in Milwaukee, Wisconsin.