Regal Rexnord (NYSE:RRX) & Burnham (OTCMKTS:BURCA) Critical Comparison

Regal Rexnord (NYSE:RRX) and Burnham (OTCMKTS:BURCA) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.

Earnings and Valuation

This table compares Regal Rexnord and Burnham”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regal Rexnord	$6.03 billion	1.58	$196.20 million	$3.76	38.16
Burnham	$270.18 million	0.31	$11.95 million	$3.48	7.05

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

Dividends

Regal Rexnord pays an annual dividend of $1.40 per share and has a dividend yield of 1.0%. Burnham pays an annual dividend of $0.92 per share and has a dividend yield of 3.7%. Regal Rexnord pays out 37.2% of its earnings in the form of a dividend. Burnham pays out 26.4% 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. Burnham is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

99.7% of Regal Rexnord shares are owned by institutional investors. Comparatively, 1.5% of Burnham shares are owned by institutional investors. 0.8% of Regal Rexnord shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Regal Rexnord and Burnham’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Regal Rexnord	4.28%	9.73%	4.46%
Burnham	5.93%	13.16%	7.64%

Risk and Volatility

Regal Rexnord has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, Burnham has a beta of 0.15, meaning that its share price is 85% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Regal Rexnord and Burnham, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regal Rexnord	0	0	8	0	3.00
Burnham	0	0	0	0	0.00

Regal Rexnord presently has a consensus target price of $181.63, suggesting a potential upside of 26.60%. Given Regal Rexnord’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Regal Rexnord is more favorable than Burnham.

Summary

Regal Rexnord beats Burnham on 11 of the 16 factors compared between the two stocks.

About Regal Rexnord

Regal Rexnord Corporation manufactures and sells industrial powertrain solutions, power transmission components, electric motors and electronic controls, air moving products, and specialty electrical components and systems worldwide. The Industrial Powertrain Solutions segment provides mounted and unmounted bearings, couplings, mechanical power transmission drives and components, gearboxes, gear motors, clutches, brakes, special, and industrial powertrain components and solutions for food and beverage, bulk material handling, eCommerce/warehouse distribution, energy, mining, marine, agricultural machinery, turf and garden, and general industrial markets. The Power Efficiency Solutions segment offers AC and DC motors, electronic variable speed controls, and blowers for residential, commercial HVAC, water heaters, commercial refrigeration, commercial building ventilation, pool and spa, irrigation, agriculture, conveying, and general commercial equipment markets. The Automation and Motion Control segment provides conveyor products, conveying automation subsystems, aerospace components, rotary precision motion solutions, high-efficiency miniature motors, motion controls, automation transfer switches, and switchgear for industrial applications and automation systems for material handling, aerospace and defense, factory automation, data centers, medical device, packaging, printing, semiconductor, robotic, industrial power tool, mobile off-highway, food and beverage processing, and other applications. The Industrial Systems segment offers integral motors, alternators, and aftermarket parts and kits for agriculture, marine, mining, oil and gas, food and beverage, data centers, prime and standby power, and general industrial equipment markets. It sells its products directly to original equipment manufacturers, distributors, and end-users. The company was formerly known as Regal Beloit Corporation. The company was founded in 1955 and is based in Milwaukee, Wisconsin.

About Burnham

Burnham Holdings, Inc. designs, manufactures, and sells boilers and related heating, ventilation, and air conditioning products and accessories for residential, commercial, and industrial applications in the United States and internationally. Its residential hydronic heating products include cast iron, stainless steel, and steel boilers; cast iron and steel heat distribution products; radiators; and warm air furnaces and central air conditioning systems for the residential heating and cooling markets, including units for the manufactured housing industry. The company's commercial and industrial heating products comprise a range of cast iron, stainless steel, fire tube, water tube, copper tube boilers, and water heaters; and boiler room accessories that are used for various applications, such as military bases, multi-unit residential buildings, health care, government, education, and hospital facilities. The company sells its residential products through wholesale distributors to builders, heating contractors, fuel dealers, and utilities for resale to end-use customers; and commercial products primarily through independent sales representatives, directly to contractors, or end users. Burnham Holdings, Inc. is based in Lancaster, Pennsylvania.