Analyzing Dover (NYSE:DOV) and Tennant (NYSE:TNC)

Tennant (NYSE:TNC) and Dover (NYSE:DOV) are both industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Risk and Volatility

Tennant has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Dover has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Institutional and Insider Ownership

93.3% of Tennant shares are owned by institutional investors. Comparatively, 84.5% of Dover shares are owned by institutional investors. 2.6% of Tennant shares are owned by company insiders. Comparatively, 1.3% of Dover shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Tennant pays an annual dividend of $1.24 per share and has a dividend yield of 1.7%. Dover pays an annual dividend of $2.08 per share and has a dividend yield of 1.0%. Tennant pays out 42.5% of its earnings in the form of a dividend. Dover pays out 12.8% 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. Tennant has increased its dividend for 53 consecutive years and Dover has increased its dividend for 70 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations for Tennant and Dover, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tennant	0	2	1	0	2.33
Dover	0	6	6	0	2.50

Tennant presently has a consensus price target of $102.00, suggesting a potential upside of 36.40%. Dover has a consensus price target of $210.64, suggesting a potential upside of 5.86%. Given Tennant’s higher possible upside, research analysts plainly believe Tennant is more favorable than Dover.

Profitability

This table compares Tennant and Dover’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tennant	4.42%	16.55%	8.65%
Dover	28.37%	17.62%	9.94%

Valuation & Earnings

This table compares Tennant and Dover”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tennant	$1.29 billion	1.05	$83.70 million	$2.92	25.61
Dover	$7.92 billion	3.44	$2.70 billion	$16.26	12.24

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

Summary

Dover beats Tennant on 12 of the 17 factors compared between the two stocks.

About Tennant

Tennant Company, together with its subsidiaries, designs, manufactures, and markets floor cleaning equipment in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers a suite of products, including floor maintenance and cleaning equipment, detergent-free and other sustainable cleaning technologies, aftermarket parts and consumables, equipment maintenance and repair services, and asset management solutions. It provides business solutions, such as financing, rental, and leasing programs, as well as machine-to-machine asset management solutions. The company offers its products under the Tennant, Nobles, Alfa Uma Empresa Tennant, IPC, Gaomei, and Rongen brands, as well as private-label brands. Its products are used in retail establishments and distribution centers; factories and warehouses; and public venues, such as arenas and stadiums, office buildings, schools and universities, hospitals and clinics, and other environments. The company markets its products to contract cleaners and businesses through direct sales and service organizations, as well as through a network of authorized distributors. Tennant Company was founded in 1870 and is headquartered in Eden Prairie, Minnesota.

About Dover

Dover Corporation provides equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services worldwide. The company's Engineered Products segment provides various equipment, component, software, solution, and services that are used in vehicle aftermarket, waste handling, industrial automation, aerospace and defense, industrial winch and hoist, and fluid dispensing end-market. This segment offers manual and power clamp, rotary and linear mechanical indexer, conveyor, pick and place unit, glove port, and manipulator, as well as end-of-arm robotic gripper, slide, and end effector; winches, hoists, bearings, drives, and electric monitoring system; and radio frequency and microwave filters and switches, and signal intelligence solutions. Its Clean Energy & Fueling segment offers component, equipment, and software and service solution enabling safe storage and transport of fuel, cryogenic gases, and hazardous fluids, as well as operation of retail fueling and vehicle wash establishment. The company's Imaging & Identification segment provides precision marking and coding, product traceability equipment, brand protection, and digital textile printing equipment and solution, as well as related consumable, software, and service to packaged and consumer goods, pharmaceutical, manufacturing, fashion and apparel, and other end-market. Its Pumps & Process Solutions segment manufactures specialty pump, connector, flow meter, fluid connecting solution, plastics and polymer processing equipment, and engineered components for rotating and reciprocating machines. The company's Climate & Sustainability Technologies segment manufactures refrigeration system, refrigeration display case, commercial glass refrigerator and freezer door, and brazed plate heat exchanger for industrial heating and cooling, and residential climate control applications. The company was incorporated in 1947 and is headquartered in Downers Grove, Illinois.