Analyzing AZZ (NYSE:AZZ) & Wartsila (OTCMKTS:WRTBY)

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

Risk & Volatility

AZZ has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Wartsila has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Institutional and Insider Ownership

90.9% of AZZ shares are held by institutional investors. 1.8% of AZZ shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for AZZ and Wartsila, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AZZ	0	3	6	2	2.91
Wartsila	1	2	0	0	1.67

AZZ currently has a consensus target price of $115.43, suggesting a potential upside of 18.24%. Given AZZ’s stronger consensus rating and higher probable upside, research analysts plainly believe AZZ is more favorable than Wartsila.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AZZ	$1.58 billion	1.86	$128.83 million	$10.40	9.39
Wartsila	$6.98 billion	2.54	$544.30 million	$0.20	30.00

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

Dividends

AZZ pays an annual dividend of $0.80 per share and has a dividend yield of 0.8%. Wartsila pays an annual dividend of $0.03 per share and has a dividend yield of 0.5%. AZZ pays out 7.7% of its earnings in the form of a dividend. Wartsila pays out 15.0% 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. AZZ is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AZZ	19.69%	15.01%	7.78%
Wartsila	8.19%	22.76%	7.28%

Summary

AZZ beats Wartsila on 12 of the 17 factors compared between the two stocks.

About AZZ

AZZ Inc. provides hot-dip galvanizing and coil coating solutions in North America. It offers metal finishing solutions for corrosion protection, including hot-dip galvanizing, spin galvanizing, powder coating, anodizing, and plating to steel fabrication and other industries, as well as to fabricators or manufacturers that provide services to the transmission and distribution, bridge and highway, petrochemical, and general industrial markets; and original equipment manufacturers. It also provides aesthetic and corrosion protective coatings and related value-added services for steel and aluminum coil primarily serving the construction; appliance; heating, ventilation, and air conditioning; container; transportation; and other end markets. The company was incorporated in 1956 and is headquartered in Fort Worth, Texas.

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.