Analyzing LeGrand (OTCMKTS:LGRDY) and Rockwell Automation (NYSE:ROK)

Rockwell Automation (NYSE:ROK) and LeGrand (OTCMKTS:LGRDY) are both large-cap industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Rockwell Automation and LeGrand, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rockwell Automation	0	12	9	0	2.43
LeGrand	0	5	5	1	2.64

Rockwell Automation presently has a consensus price target of $469.14, suggesting a potential upside of 13.00%. Given Rockwell Automation’s higher possible upside, equities analysts plainly believe Rockwell Automation is more favorable than LeGrand.

Profitability

This table compares Rockwell Automation and LeGrand’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rockwell Automation	13.39%	39.83%	12.97%
LeGrand	13.01%	17.74%	7.34%

Insider and Institutional Ownership

75.7% of Rockwell Automation shares are held by institutional investors. 0.8% of Rockwell Automation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Rockwell Automation pays an annual dividend of $5.52 per share and has a dividend yield of 1.3%. LeGrand pays an annual dividend of $0.34 per share and has a dividend yield of 1.1%. Rockwell Automation pays out 51.7% of its earnings in the form of a dividend. LeGrand pays out 29.3% 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. Rockwell Automation has raised its dividend for 15 consecutive years. Rockwell Automation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Rockwell Automation and LeGrand”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rockwell Automation	$8.34 billion	5.53	$869.00 million	$10.67	38.91
LeGrand	$10.72 billion	3.82	$1.41 billion	$1.16	26.92

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

Risk and Volatility

Rockwell Automation has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500. Comparatively, LeGrand has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Summary

Rockwell Automation beats LeGrand on 13 of the 18 factors compared between the two stocks.

About Rockwell Automation

Rockwell Automation, Inc. provides industrial automation and digital transformation solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates through three segments, Intelligent Devices, Software & Control, and Lifecycle Services. Its solutions include hardware and software products and services. The Intelligent Devices segment offers drives, motion, safety, sensing, industrial components, and configured-to-order products. The Software & Control segment provides control and visualization software and hardware, information software, and network and security infrastructure solutions. The Lifecycle Services segment provides consulting, professional services and solutions, and connected and maintenance services. The company sells its solutions primarily through independent distributors in relation with its direct sales force. It serves discrete end markets, including automotive, semiconductor, and warehousing and logistics, as well as general industries comprising printing and publishing, marine, glass, fiber and textiles, airports, and aerospace; hybrid end markets, such as food and beverage, life sciences, household and personal care, and tire, as well as eco industrial, including water/wastewater, waste management, mass transit, and renewable energy; and process end markets comprising oil and gas, mining, metals, chemicals, pulp and paper, and others. Rockwell Automation, Inc. was founded in 1903 and is headquartered in Milwaukee, Wisconsin.

About LeGrand

Legrand SA, together with its subsidiaries, manufactures, distributes, and sells electrical and digital building infrastructures in Europe, North and Central America, and internationally. The company offers energy distribution, protection, and management solutions, such as electric vehicle charging, residential and small commercial panels, switchboards and power cabinets, and UPS devices; and wiring devices, connected home and building control solutions, and guestroom solutions, as well as back, junction, DCL, and floor boxes. It also provides security, communication, and network solutions, including access security, digital home networks, emergency lighting, fire alarms, IT networks, intercom and door entry, and nurse call systems; conduits and cable management solutions comprising trunking, ducts, tubes, floor boxes, columns and feeders, and workstation solutions; industrial products, such as enclosures, connections, transformers and power supply, marking accessories and cable ties, motor control and protection, fuse protection, and industrial plugs and sockets, as well as control, button, and signaling products; installation accessories, including wiring accessories, extension cords, multi-outlet units, cable ties and fasteners, and connection boxes and terminals; and lighting products and accessories. The company's products are used in hotels, offices, data centers, shopping centers, health care, industrial, and residential buildings. It also exports its products to approximately 170 countries. Legrand SA was founded in 1865 and is headquartered in Limoges, France.