Head-To-Head Review: IDEX (NYSE:IEX) and Twin Disc (NASDAQ:TWIN)

IDEX (NYSE:IEX) and Twin Disc (NASDAQ:TWIN) are both industrials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, valuation, earnings and dividends.

Profitability

This table compares IDEX and Twin Disc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
IDEX	14.05%	15.16%	8.60%
Twin Disc	-0.56%	-1.25%	-0.59%

Institutional & Insider Ownership

98.0% of IDEX shares are held by institutional investors. Comparatively, 65.3% of Twin Disc shares are held by institutional investors. 0.5% of IDEX shares are held by company insiders. Comparatively, 21.3% of Twin Disc shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares IDEX and Twin Disc”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
IDEX	$3.27 billion	3.88	$505.00 million	$6.19	27.21
Twin Disc	$340.74 million	0.46	$10.99 million	$0.29	37.83

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

Analyst Recommendations

This is a summary of current ratings for IDEX and Twin Disc, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
IDEX	0	1	5	0	2.83
Twin Disc	0	0	1	0	3.00

IDEX currently has a consensus target price of $201.7143, suggesting a potential upside of 19.75%. Twin Disc has a consensus target price of $12.00, suggesting a potential upside of 9.39%. Given IDEX’s higher probable upside, equities analysts plainly believe IDEX is more favorable than Twin Disc.

Dividends

IDEX pays an annual dividend of $2.84 per share and has a dividend yield of 1.7%. Twin Disc pays an annual dividend of $0.16 per share and has a dividend yield of 1.5%. IDEX pays out 45.9% of its earnings in the form of a dividend. Twin Disc pays out 55.2% 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. IDEX has increased its dividend for 16 consecutive years. IDEX is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

IDEX has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, Twin Disc has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.

Summary

IDEX beats Twin Disc on 15 of the 17 factors compared between the two stocks.

About IDEX

IDEX Corporation, together with its subsidiaries, provides applied solutions worldwide. The company operates through three segments: Fluid & Metering Technologies (FMT), Health & Science Technologies (HST), and Fire & Safety/Diversified Products (FSDP). The FMT segment designs, produces, and distributes positive displacement pumps, valves, small volume provers, flow meters, injectors, and other fluid-handling pump modules and systems, as well as flow monitoring and other services for the food, chemical, general industrial, water and wastewater, agricultural, and energy industries. The HST segment designs, produces, and distributes precision fluidics positive displacement pumps, powder and liquid processing technologies, drying systems, micro-precision components, pneumatic components and sealing solutions, high performance molded and extruded sealing components, custom mechanical and shaft seals, engineered hygienic mixers and valves, biocompatible medical devices and implantables, air compressors and blowers, optical components and coatings, laboratory and commercial equipment, and precision photonic solutions. This segment serves food and beverage, life sciences, analytical instruments, pharmaceutical and biopharmaceutical, industrial, semiconductor, automotive/transportation, medical/dental, energy, cosmetics, marine, chemical, wastewater and water treatment, research and aerospace/defense markets. The FSDP segment designs, produces, and distributes firefighting pumps, valves and controls, rescue tools, lifting bags, and other components and systems for the fire and rescue industry; engineered stainless steel banding and clamping devices for various industrial and commercial applications; and precision equipment for dispensing, metering, and mixing colorants and paints used in retail and commercial businesses. IDEX Corporation was incorporated in 1987 and is headquartered in Northbrook, Illinois.

About Twin Disc

Twin Disc, Incorporated engages in the design, manufacture, and sale of marine and heavy duty off-highway power transmission equipment in the United States, the Netherlands, China, Australia, Italy, and internationally. The company operates in two segments, Manufacturing and Distribution. Its principal products include marine transmissions, azimuth drives, surface drives, propellers, and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches, and controls systems. The company also provides third-party manufactured products. It sells its products through a direct sales force and distributor network to customers primarily in the pleasure craft, commercial marine, patrol, and military marine markets, as well as in the energy and natural resources, government, agriculture, recycling, construction, oil and gas, and industrial markets. The company was incorporated in 1918 and is headquartered in Milwaukee, Wisconsin.