Head to Head Analysis: Wartsila (OTCMKTS:WRTBY) vs. Eaton (NYSE:ETN)

Wartsila (OTCMKTS:WRTBY) and Eaton (NYSE:ETN) are both large-cap industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Wartsila and Eaton, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wartsila	0	2	0	0	2.00
Eaton	0	6	14	0	2.70

Eaton has a consensus target price of $377.89, suggesting a potential downside of 0.26%. Given Eaton’s stronger consensus rating and higher probable upside, analysts plainly believe Eaton is more favorable than Wartsila.

Profitability

This table compares Wartsila and Eaton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wartsila	8.09%	22.57%	7.19%
Eaton	15.55%	23.41%	11.31%

Valuation & Earnings

This table compares Wartsila and Eaton”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wartsila	$6.98 billion	2.33	$544.30 million	$0.20	27.50
Eaton	$24.88 billion	5.96	$3.79 billion	$9.91	38.23

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

Volatility & Risk

Wartsila has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, Eaton has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

Dividends

Wartsila pays an annual dividend of $0.03 per share and has a dividend yield of 0.5%. Eaton pays an annual dividend of $4.16 per share and has a dividend yield of 1.1%. Wartsila pays out 15.0% of its earnings in the form of a dividend. Eaton pays out 42.0% 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.

Insider and Institutional Ownership

83.0% of Eaton shares are held by institutional investors. 0.3% of Eaton shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Eaton beats Wartsila on 15 of the 16 factors compared between the two stocks.

About Wartsila

Wärtsilä Oyj Abp offers technologies and lifecycle solutions for the marine and energy markets worldwide. It offers engine power plant products, such as gas, multi-fuel, and diesel engines; GEMS Digital Energy Platform, a smart software platform that monitors, controls, and optimizes energy assets on site and portfolio levels; GridSolv Quantum, a fully integrated energy storage solution, which enables ease of deployment and sustainable energy optimization; GEMS Power Plant Controllers; GEMS Fleet Director, which provides centralized real-time visibility into a global fleet of power plants; and GEMS Grid Controller that conducts intelligent grid control and optimized power management for microgrids of various sizes. The company also provides GEMS smart energy management software platform to remotely monitor, operate, identify, and diagnose assets; lifecycle solutions for power plants; power and propulsion products, such as electric shipping and hybrid ships, engine and generating sets, propulsors and gears, and shaft line solutions; liquid and gas handling products, including ballast water management, freshwater generation, waste and wastewater treatment, gas solutions, and exhaust treatment equipment; port and fleet optimization; simulation and training solutions; and automation, navigation, and control systems. The company was founded in 1834 and is headquartered in Helsinki, Finland.

About Eaton

Eaton Corporation plc operates as a power management company worldwide. The company’s Electrical Americas and Electrical Global segment provides electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality and connectivity products, wiring devices, circuit protection products, utility power distribution products, power reliability equipment, and services, as well as hazardous duty electrical equipment, emergency lighting, fire detection, explosion-proof instrumentation, and structural support systems. Its Aerospace segment offers pumps, motors, hydraulic power units, hoses and fittings, and electro-hydraulic pumps; valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems, and nose wheel steering systems; hose, thermoplastic tubing products, fittings, adapters, couplings, and sealing and ducting products; air-to-air refueling systems, fuel pumps, fuel inerting products, sensors, and adapters and regulators; oxygen generation system, payload carriages, and thermal management products; and wiring connectors and cables, as well as hydraulic and bag filters, strainers and cartridges, and golf grips for manufacturers of commercial and military aircraft, and related after-market customers, as well as industrial applications. The company’s Vehicle segment offers transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, locking and limited slip differentials, transmission controls, and fuel vapor components for the vehicle industry. Its eMobility segment provides voltage inverters, converters, fuses, circuit protection units, vehicle controls, power distribution systems, fuel tank isolation valves, and commercial vehicle hybrid systems. Eaton Corporation plc was founded in 1911 and is based in Dublin, Ireland.