Critical Analysis: Alta Equipment Group (NYSE:ALTG) & Parker-Hannifin (NYSE:PH)

Alta Equipment Group (NYSE:ALTG) and Parker-Hannifin (NYSE:PH) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, valuation, risk and earnings.

Analyst Ratings

This is a breakdown of current ratings and target prices for Alta Equipment Group and Parker-Hannifin, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alta Equipment Group	0	1	2	2	3.20
Parker-Hannifin	0	4	13	0	2.76

Alta Equipment Group currently has a consensus target price of $11.25, suggesting a potential upside of 50.30%. Parker-Hannifin has a consensus target price of $739.12, suggesting a potential upside of 4.11%. Given Alta Equipment Group’s stronger consensus rating and higher probable upside, analysts plainly believe Alta Equipment Group is more favorable than Parker-Hannifin.

Volatility & Risk

Alta Equipment Group has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500. Comparatively, Parker-Hannifin has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500.

Insider & Institutional Ownership

73.6% of Alta Equipment Group shares are owned by institutional investors. Comparatively, 82.4% of Parker-Hannifin shares are owned by institutional investors. 19.2% of Alta Equipment Group shares are owned by insiders. Comparatively, 0.4% of Parker-Hannifin shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Alta Equipment Group and Parker-Hannifin”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alta Equipment Group	$1.88 billion	0.13	-$62.10 million	($2.23)	-3.36
Parker-Hannifin	$19.93 billion	4.55	$2.84 billion	$25.97	27.34

Parker-Hannifin has higher revenue and earnings than Alta Equipment Group. Alta Equipment Group is trading at a lower price-to-earnings ratio than Parker-Hannifin, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Alta Equipment Group and Parker-Hannifin’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alta Equipment Group	-3.83%	-80.23%	-4.64%
Parker-Hannifin	17.14%	26.80%	11.89%

Dividends

Alta Equipment Group pays an annual dividend of $0.23 per share and has a dividend yield of 3.1%. Parker-Hannifin pays an annual dividend of $7.20 per share and has a dividend yield of 1.0%. Alta Equipment Group pays out -10.3% of its earnings in the form of a dividend. Parker-Hannifin pays out 27.7% 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. Parker-Hannifin has raised its dividend for 70 consecutive years. Alta Equipment Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Parker-Hannifin beats Alta Equipment Group on 11 of the 18 factors compared between the two stocks.

About Alta Equipment Group

Alta Equipment Group Inc. owns and operates integrated equipment dealership platforms in the United States. It operates through three segments: Material Handling, Construction Equipment, and Master Distribution. The company operates a branch network that sells, rents, and provides parts and service support for various categories of specialized equipment, including lift trucks and other material handling equipment, heavy and compact earthmoving equipment, crushing and screening equipment, environmental processing equipment, cranes and aerial work platforms, paving and asphalt equipment, and other construction equipment and related products. It also offers repair and maintenance services for its equipment. In addition, the company designs and builds warehouses; provides automated equipment installation and system integration solutions; and distributes environmental processing equipment. It serves various manufacturing, food and beverage, automotive, municipal/government, education, pharmaceutical and medical, wholesale and retail distribution, construction, agriculture, road building, mining, recycling, and waste management sectors. Alta Equipment Group Inc. was founded in 1984 and is headquartered in Livonia, Michigan.

About Parker-Hannifin

Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. The company operates through two segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial segment offers sealing, shielding, thermal products and systems, adhesives, coatings, and noise vibration and harshness solutions; filters, systems, and diagnostics solutions to ensure purity and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors used in fluid and gas handling; and hydraulic, pneumatic, and electromechanical components and systems for builders and users of mobile and industrial machinery and equipment. This segment sells its products to original equipment manufacturers (OEMs) and distributors who serve the replacement markets in manufacturing, packaging, processing, transportation, construction, refrigeration and air conditioning, agricultural, and military machinery and equipment industries. The Aerospace Systems segment offers products for use in commercial and military airframe and engine programs, such as control actuation systems and components, engine build-up ducting, engine exhaust nozzles and assemblies, engine systems and components, fluid conveyance systems and components, fuel systems and components, fuel tank inerting systems, hydraulic systems and components, lubrication components, avionics, sensors, pneumatic control components, thermal management products, fire detection and suppression systems and components, and wheels and brakes, as well as fluid metering, delivery, and atomization devices. This segment markets its products directly to OEMs and end users. The company markets its products through direct-sales employees, independent distributors, and sales representatives. Parker-Hannifin Corporation was founded in 1917 and is headquartered in Cleveland, Ohio.