Fortive (NYSE:FTV) versus Valmont Industries (NYSE:VMI) Critical Analysis

Valmont Industries (NYSE:VMI) and Fortive (NYSE:FTV) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Valuation and Earnings

This table compares Valmont Industries and Fortive”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valmont Industries	$4.10 billion	2.26	$334.78 million	$25.68	18.73
Fortive	$4.16 billion	4.06	$579.20 million	$1.69	33.05

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

Dividends

Valmont Industries pays an annual dividend of $3.08 per share and has a dividend yield of 0.6%. Fortive pays an annual dividend of $0.28 per share and has a dividend yield of 0.5%. Valmont Industries pays out 12.0% of its earnings in the form of a dividend. Fortive pays out 16.6% 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. Valmont Industries has increased its dividend for 1 consecutive years and Fortive has increased its dividend for 2 consecutive years. Valmont Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Valmont Industries has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Fortive has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Valmont Industries and Fortive, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valmont Industries	0	2	4	0	2.67
Fortive	2	8	2	0	2.00

Valmont Industries currently has a consensus price target of $587.00, indicating a potential upside of 22.02%. Fortive has a consensus price target of $63.10, indicating a potential upside of 12.98%. Given Valmont Industries’ stronger consensus rating and higher probable upside, research analysts plainly believe Valmont Industries is more favorable than Fortive.

Institutional & Insider Ownership

87.8% of Valmont Industries shares are held by institutional investors. Comparatively, 94.9% of Fortive shares are held by institutional investors. 1.4% of Valmont Industries shares are held by insiders. Comparatively, 0.7% of Fortive shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Valmont Industries and Fortive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valmont Industries	11.70%	25.57%	12.44%
Fortive	12.38%	15.33%	8.23%

Summary

Valmont Industries beats Fortive on 10 of the 17 factors compared between the two stocks.

About Valmont Industries

Valmont Industries, Inc. operates as manufacturer of products and services for infrastructure and agriculture markets in the United States, Australia, Brazil, and internationally. It operates through two segments, Infrastructure and Agriculture. The company manufactures and distributes steel, pre-stressed concrete, composite structures for electrical transmission, substation, and distribution applications; and designs, engineers, and manufactures metal, steel, wood, aluminum, and composite poles and structures for lighting and transportation applications. It also offers galvanizing, anodizing, painting, and powder coating services for paint products; towers, small cell structures, camouflage concealment solutions, passive intermodulation mitigation equipment, and components for wireless communication markets; and solar single-axis tracker product, an integrated system of steel structures, electric motors, and electronic controllers, as well as provides coatings services to preserve metal products. In addition, the company manufactures center pivot components and linear irrigation equipment for the agricultural markets, such as parts and tubular products for industrial customers; advanced technology solutions for agricultural sector; mechanical irrigation equipment and service parts under the Valley brand name. It serves municipalities and government entities, commercial lighting fixtures manufacturing companies, contractors, telecommunications and utility companies, and farmers, as well as the general manufacturing sector. Valmont Industries, Inc. was founded in 1946 and is headquartered in Omaha, Nebraska.

About Fortive

Fortive Corporation designs, develops, manufactures, and services professional and engineered products, software, and services in the United States, China, and internationally. It operates in three segments: Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions. The Intelligent Operating Solutions segment provides advanced instrumentation, software, and services, including electrical test and measurement, facility and asset lifecycle software applications, and connected worker safety and compliance solutions for manufacturing, process industries, healthcare, utilities and power, communications and electronics, and other industries. This segment markets its products and services under the ACCRUENT, FLUKE, GORDIAN, INDUSTRIAL SCIENTIFIC, INTELEX, PRUFTECHNIK, and SERVICECHANNEL brands. The Precision Technologies segment offers electrical test and measurement, sensing and material technologies for industrial, power and energy, automotive, medical equipment, food and beverage, aerospace and defense, semiconductor, and other general industries under the ANDERSON-NEGELE, GEMS, SETRA, HENGSTLER-DYNAPAR, QUALITROL, PACIFIC SCIENTIFIC, KEITHLEY, and TEKTRONIX brand names. The Advanced Healthcare Solutions segment provides critical workflow solutions comprising instrument sterilization, instrument tracking, design and manufacture of cell therapy equipment, biomedical test tools, radiation detection and safety monitoring, and end-to-end clinical productivity software and solutions under the ASP, CENSIS, CENSITRAC, EVOTECH, FLUKE BIOMEDICAL, INVETECH, LANDAUER, PROVATION, RAYSAFE, and STERRAD brands. Fortive Corporation was incorporated in 2015 and is headquartered in Everett, Washington.