Financial Survey: Pentair (NYSE:PNR) and Franklin Electric (NASDAQ:FELE)

Pentair (NYSE:PNR) and Franklin Electric (NASDAQ:FELE) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.

Institutional & Insider Ownership

92.4% of Pentair shares are owned by institutional investors. Comparatively, 80.0% of Franklin Electric shares are owned by institutional investors. 1.3% of Pentair shares are owned by insiders. Comparatively, 2.9% of Franklin Electric shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Pentair and Franklin Electric, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pentair	2	7	7	1	2.41
Franklin Electric	0	3	0	0	2.00

Pentair currently has a consensus target price of $76.59, indicating a potential upside of 15.43%. Franklin Electric has a consensus target price of $117.50, indicating a potential upside of 23.19%. Given Franklin Electric’s higher probable upside, analysts clearly believe Franklin Electric is more favorable than Pentair.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pentair	$4.18 billion	2.54	$653.80 million	$3.77	17.60
Franklin Electric	$2.13 billion	1.98	$147.09 million	$4.45	21.43

Pentair has higher revenue and earnings than Franklin Electric. Pentair is trading at a lower price-to-earnings ratio than Franklin Electric, 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 1.6%. Franklin Electric pays an annual dividend of $1.12 per share and has a dividend yield of 1.2%. Pentair pays out 28.6% of its earnings in the form of a dividend. Franklin Electric pays out 25.2% 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 raised its dividend for 7 consecutive years and Franklin Electric has raised its dividend for 33 consecutive years.

Profitability

This table compares Pentair and Franklin Electric’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pentair	15.44%	20.10%	11.25%
Franklin Electric	8.83%	15.45%	9.78%

Risk and Volatility

Pentair has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500. Comparatively, Franklin Electric has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.

Summary

Pentair beats Franklin Electric on 12 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 Franklin Electric

Franklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. The company operates through Water Systems, Fueling Systems, and Distribution segments. The Water Systems segment offers submersible motors, drives, pumps, electronic controls, water treatment systems, monitoring devices, and related parts and equipment. Its motors and pumps are used principally for pumping clean water and wastewater in various residential, agricultural, municipal, and industrial applications; and manufactures electronic drives and controls that are used in motors for controlling functionality, as well as provides protection from various hazards, such as electrical surges, over-heating, and dry wells or tanks. The Fueling Systems segment provides pumps, pipes, sumps, fittings, vapor recovery components, electronic controls, monitoring devices, and related parts and equipment primarily for use in fueling system applications. This segment serves other energy markets, such as power reliability systems, as well as includes electronic devices for online monitoring of the power utility, hydroelectric, and telecommunication and data center infrastructure. The Distribution segment sells to and provides presale support and specifications to the installing contractors. It sells products produced by the Water Systems segment. The company sells its products to wholesale and retail distributors, specialty distributors, original equipment manufacturers, industrial and petroleum equipment distributors, and oil and utility companies through its employee sales force and independent manufacturing representatives. Franklin Electric Co., Inc. was founded in 1944 and is headquartered in Fort Wayne, Indiana.