Analyzing Kone Oyj (OTCMKTS:KNYJY) and Pentair (NYSE:PNR)

Pentair (NYSE:PNR) and Kone Oyj (OTCMKTS:KNYJY) are both industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Volatility & Risk

Pentair has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, Kone Oyj has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Earnings and Valuation

This table compares Pentair and Kone Oyj”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pentair	$4.01 billion	2.11	$653.80 million	$3.98	13.32
Kone Oyj	$12.72 billion	2.07	$1.11 billion	$1.06	27.45

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

Dividends

Pentair pays an annual dividend of $1.08 per share and has a dividend yield of 2.0%. Kone Oyj pays an annual dividend of $0.45 per share and has a dividend yield of 1.5%. Pentair pays out 27.1% of its earnings in the form of a dividend. Kone Oyj pays out 42.5% 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. Pentair has increased its dividend for 7 consecutive years. Pentair is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Pentair and Kone Oyj’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pentair	16.24%	20.62%	11.44%
Kone Oyj	8.33%	38.87%	10.68%

Institutional and Insider Ownership

92.4% of Pentair shares are owned by institutional investors. 1.3% of Pentair shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for Pentair and Kone Oyj, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pentair	4	5	9	0	2.28
Kone Oyj	2	4	1	1	2.12

Pentair presently has a consensus target price of $87.19, indicating a potential upside of 64.51%. Given Pentair’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Pentair is more favorable than Kone Oyj.

Summary

Pentair beats Kone Oyj on 13 of the 18 factors compared between the two stocks.

About Pentair

Pentair plc provides various water solutions in the United States, Western Europe, China, Eastern Europe, Latin America, the Middle East, Southeast Asia, Australia, Canada, and Japan. The company operates through three segments: Flow, Water Solutions, and Pool. The Flow segment designs, manufactures, and sells fluid treatment and pump products and systems, including pressure vessels, gas recovery solutions, membrane bioreactors, wastewater reuse systems and advanced membrane filtration, separation systems, water disposal pumps, water supply pumps, fluid transfer pumps, turbine pumps, solid handling pumps, and agricultural spray nozzles for fluid delivery, ion exchange, desalination, food and beverage, separation technologies in the oil and gas industry, residential and municipal wells, water treatment, wastewater solids handling, pressure boosting, circulation and transfer, fire suppression, flood control, agricultural irrigation, and crop spray in residential, commercial, and industrial markets. The Water Solutions segment provides commercial and residential water treatment products and systems, including pressure tanks, control valves, activated carbon products, commercial ice machines, conventional filtration products, and point-of-entry and point-of-use water treatment systems, as well as installation and preventative services for use in residential whole home water filtration, drinking water filtration, and water softening solutions, as well as commercial total water management and filtration in foodservice operations. The Pool segment provides residential and commercial pool equipment and accessories comprising pumps, filters, heaters, lights, automatic controls, automatic cleaners, maintenance equipment, and pool accessories for applications in residential and commercial pool maintenance, pool repair, renovation, service, and construction and aquaculture solutions. Pentair plc was founded in 1966 and is headquartered in London, the United Kingdom.

About Kone Oyj

KONE Oyj, together with its subsidiaries, engages in the elevator and escalator business worldwide. The company provides elevators, escalators, and automatic building doors. It offers maintenance services; and modernization solutions. In addition, the company offers KONE Office Flow, a connected solution that allows for personalized user experiences and touch-free access; health and well-being solutions for elevators, escalators, and doors; KONE Access, an access control system, which is integrated with elevator system and building doors; KONE Destination, a destination control system that reduce waiting and travel times; KONE infotainment, a communication channel for building tenants and visitors; and monitoring solutions that enable real-time inspection of elevators and escalators. Further, it provides people flow planning and consulting services; solutions for special buildings and large projects; cybersecurity solutions; and energy solutions for greener buildings. KONE Oyj was founded in 1908 and is based in Espoo, Finland.