Ferguson (NYSE:FERG) vs. IDEX (NYSE:IEX) Head-To-Head Analysis

Ferguson (NYSE:FERG) and IDEX (NYSE:IEX) are both large-cap industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Institutional & Insider Ownership

82.0% of Ferguson shares are held by institutional investors. Comparatively, 98.0% of IDEX shares are held by institutional investors. 0.2% of Ferguson shares are held by insiders. Comparatively, 0.5% of IDEX shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Ferguson has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, IDEX has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Ferguson and IDEX, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferguson	0	6	10	2	2.78
IDEX	0	3	6	0	2.67

Ferguson currently has a consensus price target of $269.73, suggesting a potential upside of 13.35%. IDEX has a consensus price target of $234.70, suggesting a potential upside of 10.39%. Given Ferguson’s stronger consensus rating and higher possible upside, equities analysts clearly believe Ferguson is more favorable than IDEX.

Profitability

This table compares Ferguson and IDEX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ferguson	6.98%	38.92%	12.87%
IDEX	14.38%	15.29%	8.89%

Dividends

Ferguson pays an annual dividend of $3.56 per share and has a dividend yield of 1.5%. IDEX pays an annual dividend of $2.84 per share and has a dividend yield of 1.3%. Ferguson pays out 40.4% of its earnings in the form of a dividend. IDEX pays out 42.0% 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. IDEX has increased its dividend for 16 consecutive years. Ferguson is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Ferguson and IDEX”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferguson	$31.32 billion	1.47	$1.86 billion	$8.82	26.98
IDEX	$3.46 billion	4.55	$483.20 million	$6.76	31.45

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

Summary

Ferguson beats IDEX on 12 of the 18 factors compared between the two stocks.

About Ferguson

Ferguson Enterprises Inc. distributes plumbing and heating products in North America. The company provides expertise, solutions, and products, including infrastructure, plumbing, appliances, fire, and fabrication, as well as heating, ventilation, and air conditioning (HVAC) to residential and non-residential customers. It also supplies specialist water and wastewater treatment products to residential, commercial, and infrastructure contractors, as well as supplies pipe, valves, and fittings solutions to industrial customers. In addition, it offers customized solutions, such as virtual design, fabrication, valve actuation, pre-assembly, kitting, installation, and project management services, as well as after-sales support that comprises warranty, credit, project-based billing, returns and maintenance, and repair and operations support. The company sells its products through a network of distribution centers, branches, counter service and specialist sales associates, showroom consultants, and e-commerce channels. Ferguson Enterprises Inc. was founded in 1953 and is headquartered in Newport News, Virginia.

About IDEX

IDEX Corporation, together with its subsidiaries, provides applied solutions worldwide. The company operates through three segments: Fluid & Metering Technologies (FMT), Health & Science Technologies (HST), and Fire & Safety/Diversified Products (FSDP). The FMT segment designs, produces, and distributes positive displacement pumps, valves, small volume provers, flow meters, injectors, and other fluid-handling pump modules and systems, as well as flow monitoring and other services for the food, chemical, general industrial, water and wastewater, agricultural, and energy industries. The HST segment designs, produces, and distributes precision fluidics positive displacement pumps, powder and liquid processing technologies, drying systems, micro-precision components, pneumatic components and sealing solutions, high performance molded and extruded sealing components, custom mechanical and shaft seals, engineered hygienic mixers and valves, biocompatible medical devices and implantables, air compressors and blowers, optical components and coatings, laboratory and commercial equipment, and precision photonic solutions. This segment serves food and beverage, life sciences, analytical instruments, pharmaceutical and biopharmaceutical, industrial, semiconductor, automotive/transportation, medical/dental, energy, cosmetics, marine, chemical, wastewater and water treatment, research and aerospace/defense markets. The FSDP segment designs, produces, and distributes firefighting pumps, valves and controls, rescue tools, lifting bags, and other components and systems for the fire and rescue industry; engineered stainless steel banding and clamping devices for various industrial and commercial applications; and precision equipment for dispensing, metering, and mixing colorants and paints used in retail and commercial businesses. IDEX Corporation was incorporated in 1987 and is headquartered in Northbrook, Illinois.