Contrasting RBC Bearings (NYSE:RBC) & Atlas Copco (OTCMKTS:ATLKY)

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

Dividends

RBC Bearings pays an annual dividend of $1.32 per share and has a dividend yield of 0.3%. Atlas Copco pays an annual dividend of $0.21 per share and has a dividend yield of 1.2%. RBC Bearings pays out 16.1% of its earnings in the form of a dividend. Atlas Copco pays out 37.5% 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.

Earnings & Valuation

This table compares RBC Bearings and Atlas Copco”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RBC Bearings	$1.72 billion	8.13	$246.20 million	$8.19	54.13
Atlas Copco	$16.72 billion	5.22	$2.82 billion	$0.56	31.96

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

Risk & Volatility

RBC Bearings has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, Atlas Copco has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for RBC Bearings and Atlas Copco, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RBC Bearings	0	2	6	0	2.75
Atlas Copco	1	2	3	0	2.33

RBC Bearings currently has a consensus price target of $459.17, indicating a potential upside of 3.57%. Given RBC Bearings’ stronger consensus rating and higher probable upside, research analysts plainly believe RBC Bearings is more favorable than Atlas Copco.

Profitability

This table compares RBC Bearings and Atlas Copco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RBC Bearings	15.03%	10.47%	6.67%
Atlas Copco	16.08%	25.42%	13.46%

Institutional & Insider Ownership

0.0% of Atlas Copco shares are held by institutional investors. 1.9% of RBC Bearings shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

RBC Bearings beats Atlas Copco on 9 of the 16 factors compared between the two stocks.

About RBC Bearings

RBC Bearings Incorporated manufactures and markets engineered precision bearings, components, and systems in the United States and internationally. It operates through two segments, Aerospace/Defense and Industrial. The company produces plain bearings with self-lubricating or metal-to-metal designs, including rod end bearings, spherical plain bearings, and journal bearings; roller bearings, such as tapered roller bearings, needle roller bearings, and needle bearing track rollers and cam followers, which are anti-friction products that are used in industrial applications and military aircraft platforms; and ball bearings include high precision aerospace, airframe control, thin section, and industrial ball bearings that utilize high precision ball elements to reduce friction in high-speed applications. In addition, it offers mounted bearing products include mounted ball bearings, mounted roller bearings, and mounted plain bearings; and enclosed gearing product lines, including quantis gearmotor, torque arm, tigear, magnagear and maxum, and controlled start transmission. Further, the company's power transmission components include mechanical drive components, couplings, and conveyor components; engineered hydraulics and valves for aircraft and submarine applications, and aerospace and defense aftermarket services; fasteners; precision mechanical components, which are used in various general industrial applications; and machine tool collets that are used for holding circulars or rod-like pieces. It serves automotive, tool holding, agricultural and semiconductor machinery, commercial and defense aerospace, ground defense, construction and mining, oil and natural resource extraction, heavy truck, marine, rail and train, material handling, food and beverage, packaging and canning, wind, and general industrial markets through its direct sales force, and a network of industrial and aerospace distributors. The company was founded in 1919 and is based in Oxford, Connecticut.

About Atlas Copco

Atlas Copco AB provides compressed air and gas, vacuum, energy, dewatering and industrial pump, industrial power tool, and assembly and machine vision solutions in North America, South America, Europe, Africa, the Middle East, Asia, and Oceania. It operates through Compressor Technique, Vacuum Technique, Industrial Technique, and Power Technique segments. The company offers piston compressors, oil-free tooth and scroll compressors, rotary screw compressors, oil-free blowers, oil-free centrifugal compressors, gas and process compressors, air and gas treatment equipment, expanders and pumps, and medical air solutions. It also provides oil-sealed rotary vane, dry, and liquid ring vacuum pumps; turbomolecular and cryogenic pumps; abatement and integrated systems; industrial assembly tools and solutions; self-pierce riveting solutions; adhesive dispensing and flow drill fastening equipment; material removal tools, and drills and other pneumatic products; machine vision solutions; construction and demolition tools; mobile compressors, generators, and energy storage systems; and industrial flow, portable power, portable flow, and portable air products, as well as specialty rental services. The company serves the semiconductor and flat panel, industrial manufacturing, civil engineering, demolition, exploration drilling, automotive, off-highway vehicles, electronics, aerospace, energy, food, pharmaceutical, textile, and other industries. Atlas Copco AB was founded in 1873 and is headquartered in Nacka, Sweden.