Contrasting ESCO Technologies (NYSE:ESE) and Vestas Wind Systems AS (OTCMKTS:VWDRY)

ESCO Technologies (NYSE:ESE) and Vestas Wind Systems AS (OTCMKTS:VWDRY) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, valuation, institutional ownership, analyst recommendations, earnings, risk and dividends.

Profitability

This table compares ESCO Technologies and Vestas Wind Systems AS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ESCO Technologies	11.01%	10.56%	7.20%
Vestas Wind Systems AS	3.15%	17.84%	2.36%

Valuation and Earnings

This table compares ESCO Technologies and Vestas Wind Systems AS”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ESCO Technologies	$1.03 billion	4.89	$101.88 million	$4.56	42.67
Vestas Wind Systems AS	$18.72 billion	0.89	$539.97 million	$0.20	27.45

Vestas Wind Systems AS has higher revenue and earnings than ESCO Technologies. Vestas Wind Systems AS is trading at a lower price-to-earnings ratio than ESCO Technologies, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

ESCO Technologies has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. Comparatively, Vestas Wind Systems AS has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.

Dividends

ESCO Technologies pays an annual dividend of $0.32 per share and has a dividend yield of 0.2%. Vestas Wind Systems AS pays an annual dividend of $0.02 per share and has a dividend yield of 0.4%. ESCO Technologies pays out 7.0% of its earnings in the form of a dividend. Vestas Wind Systems AS pays out 10.0% 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.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for ESCO Technologies and Vestas Wind Systems AS, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ESCO Technologies	0	0	2	0	3.00
Vestas Wind Systems AS	0	0	1	2	3.67

ESCO Technologies currently has a consensus price target of $187.50, indicating a potential downside of 3.63%. Given ESCO Technologies’ higher probable upside, research analysts clearly believe ESCO Technologies is more favorable than Vestas Wind Systems AS.

Institutional and Insider Ownership

95.7% of ESCO Technologies shares are held by institutional investors. 0.7% of ESCO Technologies shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

ESCO Technologies beats Vestas Wind Systems AS on 10 of the 17 factors compared between the two stocks.

About ESCO Technologies

ESCO Technologies Inc. produces and supplies engineered products and systems for industrial and commercial markets worldwide. It operates through three segments: Aerospace & Defense, Utility Solutions Group, and RF Test & Measurement. The Aerospace & Defense segment designs and manufactures filtration products, including hydraulic filter elements and fluid control devices used in commercial aerospace applications; filter mechanisms used in micro-propulsion devices for satellites; and custom designed filters for manned aircraft and submarines. It also designs, develops, and manufactures elastomeric-based signature reduction solutions for U.S. naval vessels; and mission-critical bushings, pins, sleeves, and precision-tolerance machined components for landing gear, rotor heads, engine mounts, flight controls, and actuation systems for the aerospace and defense industries. The Utility Solutions Group segment provides diagnostic testing solutions that enable electric power grid operators to assess the integrity of high-voltage power delivery equipment; and decision support tools for the renewable energy industry, primarily wind and solar. The RF Test & Measurement segment designs and manufactures RF test and secure communication facilities, acoustic test enclosures, RF and magnetically shielded rooms, RF measurement systems, and broadcast and recording studios; and RF absorptive materials, filters, antennas, field probes, test cells, proprietary measurement software, and other test accessories to perform various tests. The company distributes its products through a network of distributors, sales representatives, direct sales teams, and in-house sales personnel. The company was incorporated in 1990 and is based in Saint Louis, Missouri.

About Vestas Wind Systems AS

Vestas Wind Systems A/S engages in the design, manufacture, installation, and services of wind turbines the United States, Denmark, and internationally. It operates in two segments, Power Solutions and Service. The Power Solutions segment offers onshore and offshore wind power plants, wind turbines, development sites, etc. The Service segment engages in the sale of service contracts, spare parts, and related activities. Vestas Wind Systems A/S was founded in 1898 and is headquartered in Aarhus, Denmark.