Critical Contrast: Acuity (AYI) and The Competition

Acuity (NYSE:AYI) is one of 216 publicly-traded companies in the “Electrical Equipment” industry, but how does it weigh in compared to its competitors? We will compare Acuity to similar companies based on the strength of its analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.

Institutional & Insider Ownership

98.2% of Acuity shares are held by institutional investors. Comparatively, 37.3% of shares of all “Electrical Equipment” companies are held by institutional investors. 2.9% of Acuity shares are held by insiders. Comparatively, 14.5% of shares of all “Electrical Equipment” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Acuity and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Acuity	$4.64 billion	$531.30 million	19.60
Acuity Competitors	$2.39 billion	$142.37 million	21.52

Acuity has higher revenue and earnings than its competitors. Acuity is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a summary of current recommendations for Acuity and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acuity	0	5	4	0	2.44
Acuity Competitors	2293	5175	7229	439	2.38

Acuity presently has a consensus price target of $374.20, indicating a potential upside of 11.67%. As a group, “Electrical Equipment” companies have a potential upside of 47.58%. Given Acuity’s competitors higher probable upside, analysts clearly believe Acuity has less favorable growth aspects than its competitors.

Volatility & Risk

Acuity has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, Acuity’s competitors have a beta of -20.43, meaning that their average stock price is 2,143% less volatile than the S&P 500.

Profitability

This table compares Acuity and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Acuity	11.45%	20.30%	12.43%
Acuity Competitors	-354.45%	-44.26%	-7.93%

Dividends

Acuity pays an annual dividend of $0.80 per share and has a dividend yield of 0.2%. Acuity pays out 4.7% of its earnings in the form of a dividend. As a group, “Electrical Equipment” companies pay a dividend yield of 1.5% and pay out 26.8% of their earnings in the form of a dividend. Acuity has raised its dividend for 3 consecutive years.

Summary

Acuity beats its competitors on 9 of the 15 factors compared.

Acuity Company Profile

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.