Twin Disc (NASDAQ:TWIN) and Regal Rexnord (NYSE:RRX) Financial Contrast

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

Risk and Volatility

Twin Disc has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Regal Rexnord has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Dividends

Twin Disc pays an annual dividend of $0.16 per share and has a dividend yield of 1.0%. Regal Rexnord pays an annual dividend of $1.40 per share and has a dividend yield of 1.0%. Twin Disc pays out 800.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Regal Rexnord pays out 36.2% of its earnings in the form of a dividend.

Institutional and Insider Ownership

65.3% of Twin Disc shares are owned by institutional investors. Comparatively, 99.7% of Regal Rexnord shares are owned by institutional investors. 22.1% of Twin Disc shares are owned by company insiders. Comparatively, 0.8% of Regal Rexnord shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Twin Disc	0.10%	0.23%	0.10%
Regal Rexnord	4.38%	9.64%	4.52%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Twin Disc and Regal Rexnord, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Twin Disc	1	1	1	0	2.00
Regal Rexnord	1	2	7	0	2.60

Twin Disc currently has a consensus target price of $12.00, suggesting a potential downside of 23.62%. Regal Rexnord has a consensus target price of $179.63, suggesting a potential upside of 24.23%. Given Regal Rexnord’s stronger consensus rating and higher possible upside, analysts plainly believe Regal Rexnord is more favorable than Twin Disc.

Earnings and Valuation

This table compares Twin Disc and Regal Rexnord”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Twin Disc	$340.74 million	0.66	-$1.89 million	$0.02	785.50
Regal Rexnord	$6.03 billion	1.59	$196.20 million	$3.87	37.36

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

Summary

Regal Rexnord beats Twin Disc on 13 of the 16 factors compared between the two stocks.

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.

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.