Critical Comparison: Wabtec (NYSE:WAB) and Enerpac Tool Group (NYSE:EPAC)

Wabtec (NYSE:WAB) and Enerpac Tool Group (NYSE:EPAC) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Insider and Institutional Ownership

91.7% of Wabtec shares are held by institutional investors. Comparatively, 97.7% of Enerpac Tool Group shares are held by institutional investors. 0.6% of Wabtec shares are held by company insiders. Comparatively, 1.5% of Enerpac Tool Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Wabtec and Enerpac Tool Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wabtec	10.59%	15.10%	7.50%
Enerpac Tool Group	14.72%	23.21%	12.10%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Wabtec and Enerpac Tool Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wabtec	0	2	10	0	2.83
Enerpac Tool Group	0	3	1	0	2.25

Wabtec currently has a consensus target price of $313.82, indicating a potential upside of 7.30%. Enerpac Tool Group has a consensus target price of $50.00, indicating a potential upside of 41.50%. Given Enerpac Tool Group’s higher probable upside, analysts clearly believe Enerpac Tool Group is more favorable than Wabtec.

Volatility and Risk

Wabtec has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Enerpac Tool Group has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Valuation & Earnings

This table compares Wabtec and Enerpac Tool Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wabtec	$11.17 billion	4.42	$1.17 billion	$7.44	39.31
Enerpac Tool Group	$616.90 million	2.93	$92.75 million	$1.77	19.96

Wabtec has higher revenue and earnings than Enerpac Tool Group. Enerpac Tool Group is trading at a lower price-to-earnings ratio than Wabtec, indicating that it is currently the more affordable of the two stocks.

Dividends

Wabtec pays an annual dividend of $1.24 per share and has a dividend yield of 0.4%. Enerpac Tool Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. Wabtec pays out 16.7% of its earnings in the form of a dividend. Enerpac Tool Group pays out 2.3% 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. Wabtec has raised its dividend for 4 consecutive years. Wabtec is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Wabtec beats Enerpac Tool Group on 10 of the 17 factors compared between the two stocks.

About Wabtec

Westinghouse Air Brake Technologies Corporation, together with its subsidiaries, provides technology-based locomotives, equipment, systems, and services for the freight rail and passenger transit industries worldwide. It offers diesel-electric, battery, and liquid natural gas-powered locomotives; engines, electric motors, and propulsion systems; and marine and mining products. The company also offers positive train control equipment; pneumatic braking products; railway electronics; signal design and engineering services; distributed locomotive power, train cruise controls, and train remote controls; industrial/mobile Internet of Things hardware and software, edge-to-cloud, on and off-board analytics and rules, and asset performance management solutions; rail and shipper transportation management, and port visibility and optimization solutions; and network optimization solutions. In addition, it provides freight car trucks, braking equipment, and related components; air compressors and dryers; heat transfer components and systems; track and switch products; new commuter and switcher locomotives; and turbochargers. Further, the company offers freight locomotive overhauls, modernizations, and refurbishment services; locomotive and car maintenance; transit locomotive and car overhaul; unit exchange of locomotive components; and maintenance of way equipment and services. Additionally, it provides railway and freight braking equipment and related components; friction products, such as brake shoes, discs, and pads; heating, ventilation, and air conditioning equipment; access and platform screen doors; pantographs; auxiliary power converter and battery chargers; passenger information systems and closed-circuit television; signaling and railway electric relays; and doors, window assemblies, accessibility lifts, ramps, and electric charging solutions for buses. The company was founded in 1869 and is headquartered in Pittsburgh, Pennsylvania.

About Enerpac Tool Group

Enerpac Tool Group Corp. manufactures and sells a range of industrial products and solutions in the United States, the United Kingdom, Germany, Australia, Canada, China, Saudi Arabia, Brazil, France, and internationally. It operates through Industrial Tools & Services and Other segments. The Industrial Tools & Services segment designs, manufactures, and distributes branded hydraulic and mechanical tools; and provides services and tool rentals to the infrastructure, industrial maintenance, repair and operations, oil and gas, mining, alternative and renewable energy, civil construction, and other markets. It also offers branded tools and engineered heavy lifting technology solutions, and hydraulic torque wrenches; maintenance and manpower services; high-force hydraulic and mechanical tools, including cylinders, pumps, valves, and specialty tools; and bolt tensioners and other miscellaneous products. This segment markets its branded tools and services primarily under the Enerpac, Hydratight, Larzep, and Simplex brands. The Other segment designs and manufactures synthetic ropes and biomedical textiles. The company was formerly known as Actuant Corporation and changed its name to Enerpac Tool Group Corp. in January 2020. Enerpac Tool Group Corp. was incorporated in 1910 and is headquartered in Menomonee Falls, Wisconsin.