Head to Head Comparison: AMETEK (AME) vs. Franklin Electric (FELE)

AMETEK (NYSE: AME) and Franklin Electric (NASDAQ:FELE) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, risk and valuation.

Profitability

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This table compares AMETEK and Franklin Electric’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMETEK 15.85% 16.39% 7.97%
Franklin Electric 6.95% 12.97% 7.65%

Dividends

AMETEK pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. Franklin Electric pays an annual dividend of $0.43 per share and has a dividend yield of 1.0%. AMETEK pays out 21.5% of its earnings in the form of a dividend. Franklin Electric pays out 22.4% 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. Franklin Electric has increased its dividend for 8 consecutive years. Franklin Electric is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

AMETEK has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Franklin Electric has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500.

Institutional and Insider Ownership

85.8% of AMETEK shares are held by institutional investors. Comparatively, 77.9% of Franklin Electric shares are held by institutional investors. 2.1% of AMETEK shares are held by company insiders. Comparatively, 2.5% of Franklin Electric shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares AMETEK and Franklin Electric’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AMETEK $4.30 billion 4.00 $681.47 million $2.61 28.47
Franklin Electric $1.12 billion 1.72 $78.18 million $1.92 21.61

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

Analyst Ratings

This is a summary of recent recommendations for AMETEK and Franklin Electric, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMETEK 0 0 10 0 3.00
Franklin Electric 0 3 1 0 2.25

AMETEK currently has a consensus price target of $81.10, indicating a potential upside of 9.15%. Franklin Electric has a consensus price target of $47.33, indicating a potential upside of 14.06%. Given Franklin Electric’s higher possible upside, analysts clearly believe Franklin Electric is more favorable than AMETEK.

Summary

AMETEK beats Franklin Electric on 12 of the 17 factors compared between the two stocks.

About AMETEK

AMETEK, Inc. manufactures and sells electronic instruments and electromechanical devices worldwide. Its Electronic Instruments Group segment offers advanced instruments for the process, power and industrial, and aerospace markets; process and analytical instruments for the oil, gas, petrochemical, pharmaceutical, semiconductor, automation, and food and beverage markets; and instruments for the laboratory equipment, ultraprecision manufacturing, medical, and test and measurement markets. This segment also provides aircraft and engine sensors, monitoring systems, power supplies, data acquisition units, and fuel and fluid measurement systems for the aerospace industry; and power quality monitoring and metering, uninterruptible power systems, programmable power equipment, electromagnetic compatibility test equipment, sensors for gas turbines, dashboard instruments for heavy trucks and other vehicles, and instrumentation and controls for the food and beverage industries. Its Electromechanical Group segment offers engineered electrical connectors and electronics packaging used in aerospace and defense, medical, and industrial applications, as well as advanced precision motion control products for use in a range of automation applications across the medical, semiconductor, aerospace, defense, and food and beverage industries; high-purity powdered metals, strip and foil, specialty clad metals, and metal matrix composites; blowers and heat exchangers for aerospace and defense industries; and motors for use in commercial appliances, fitness equipment, food and beverage machines, hydraulic pumps, and industrial blowers. This segment also operates a network of aviation maintenance, repair, and overhaul facilities. In addition, the company offers clinical and education communication solutions for hospitals, health systems, and educational facilities. AMETEK, Inc. was founded in 1930 and is headquartered in Berwyn, Pennsylvania.

About Franklin Electric

Franklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. It operates in three segments: Water Systems, Fueling Systems, and Distribution. The Water Systems segment offers submersible motors, pumps, drives, electronic controls, monitoring devices, and related parts and equipment. Its motors and pumps are used principally for pumping clean water and wastewater in various residential, agricultural, and industrial applications; and electronic drives and controls are used in motors for controlling functionality, as well as providing protection from various hazards, such as electric surges, over-heating, and dry wells and 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 submersible fueling system applications. Its fuel pumping systems are used principally in total system solutions for underground gasoline, diesel, and biofuel systems. This segment serves other energy markets, such as power reliability systems, as well as includes intelligent electronic devices for online monitoring of the power utility, hydroelectric, and industrial markets. The Distribution segment sells to and provides pre-sale support and specifications to the installing contractors. It sells products produced by the Water Systems segment and other brands. The company sells its products to 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.

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