Financial Analysis: Standex International (NYSE:SXI) and RBC Bearings (NYSE:RBC)

RBC Bearings (NYSE:RBC) and Standex International (NYSE:SXI) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.

Valuation and Earnings

This table compares RBC Bearings and Standex International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RBC Bearings	$1.87 billion	10.51	$287.60 million	$9.09	68.34
Standex International	$790.11 million	5.35	$55.76 million	$8.21	42.54

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

Analyst Ratings

This is a breakdown of current ratings and target prices for RBC Bearings and Standex International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RBC Bearings	0	2	6	0	2.75
Standex International	0	1	4	0	2.80

RBC Bearings presently has a consensus price target of $584.00, suggesting a potential downside of 5.99%. Standex International has a consensus price target of $289.67, suggesting a potential downside of 17.05%. Given RBC Bearings’ higher possible upside, analysts clearly believe RBC Bearings is more favorable than Standex International.

Insider & Institutional Ownership

90.3% of Standex International shares are held by institutional investors. 1.9% of RBC Bearings shares are held by insiders. Comparatively, 2.5% of Standex International shares 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.

Profitability

This table compares RBC Bearings and Standex International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RBC Bearings	15.37%	11.35%	7.28%
Standex International	11.18%	14.38%	6.66%

Risk and Volatility

RBC Bearings has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Standex International has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.

Summary

RBC Bearings beats Standex International on 10 of the 14 factors compared between the two stocks.

About RBC Bearings

RBC Bearings Incorporated manufactures and markets engineered precision bearings, components, and systems in the United States and internationally. It operates through two segments, Aerospace/Defense and Industrial. The company produces plain bearings with self-lubricating or metal-to-metal designs, including rod end bearings, spherical plain bearings, and journal bearings; roller bearings, such as tapered roller bearings, needle roller bearings, and needle bearing track rollers and cam followers, which are anti-friction products that are used in industrial applications and military aircraft platforms; and ball bearings include high precision aerospace, airframe control, thin section, and industrial ball bearings that utilize high precision ball elements to reduce friction in high-speed applications. In addition, it offers mounted bearing products include mounted ball bearings, mounted roller bearings, and mounted plain bearings; and enclosed gearing product lines, including quantis gearmotor, torque arm, tigear, magnagear and maxum, and controlled start transmission. Further, the company's power transmission components include mechanical drive components, couplings, and conveyor components; engineered hydraulics and valves for aircraft and submarine applications, and aerospace and defense aftermarket services; fasteners; precision mechanical components, which are used in various general industrial applications; and machine tool collets that are used for holding circulars or rod-like pieces. It serves automotive, tool holding, agricultural and semiconductor machinery, commercial and defense aerospace, ground defense, construction and mining, oil and natural resource extraction, heavy truck, marine, rail and train, material handling, food and beverage, packaging and canning, wind, and general industrial markets through its direct sales force, and a network of industrial and aerospace distributors. The company was founded in 1919 and is based in Oxford, Connecticut.

About Standex International

Standex International Corporation, together with subsidiaries, engages in the manufacture and sale of various products and services for commercial and industrial markets in the United States and internationally. It operates through five segments: Electronics, Engraving, Scientific, Engineering Technologies, and Specialty Solutions. The Electronics segment offers reed relays, fluid level, proximity, motion, flow, HVAC condensate, and custom electronics sensors; and custom wound transformers and inductors for low and high frequency, current sense technology, advanced planar transformer technology, value added assembly, and mechanical packaging applications under the Standex Electronics, Renco, and Agile Magnetics. The Engraving segment provides mold texturizing, slush molding tools, roll engraving, hygiene product tooling, and low observation vents, as well as project management and design services for stealth aircraft; and process machinery for various industries under the Piazza Rosa, World Client Services, Tenibac-Graphion, GS Engineering, and Innovent brand names. The Scientific segment offers temperature-controlled equipment for the medical, scientific, pharmaceutical, biotech, and industrial markets under the American BioTech Supply, Lab Research Products, Corepoint, Cryosafe, CryoGuard, and Scientific brands. The Engineering Technologies segment offers net and near net formed single-source customized solutions that are used in the manufacture of engineered components for the aviation, aerospace, defense, energy, industrial, medical, marine, oil and gas, and manned and unmanned space markets under the Spincraft brand. The Specialty Solutions segment manufactures and sells refrigerated, heated, and dry merchandizing display cases; and single and double acting telescopic, and piston rod hydraulic cylinders under the Federal and Custom Hoist brands. The company was founded in 1955 and is headquartered in Salem, New Hampshire.