Critical Survey: Otis Worldwide (NYSE:OTIS) versus Ingersoll Rand (NYSE:IR)

Otis Worldwide (NYSE:OTIS) and Ingersoll Rand (NYSE:IR) are both large-cap industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Dividends

Otis Worldwide pays an annual dividend of $1.68 per share and has a dividend yield of 1.8%. Ingersoll Rand pays an annual dividend of $0.08 per share and has a dividend yield of 0.1%. Otis Worldwide pays out 48.0% of its earnings in the form of a dividend. Ingersoll Rand pays out 5.5% 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. Otis Worldwide has increased its dividend for 5 consecutive years. Otis Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Otis Worldwide and Ingersoll Rand’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Otis Worldwide	9.59%	-30.42%	14.84%
Ingersoll Rand	7.60%	12.62%	7.11%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Otis Worldwide and Ingersoll Rand, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Otis Worldwide	1	6	3	0	2.20
Ingersoll Rand	0	5	4	0	2.44

Otis Worldwide currently has a consensus price target of $101.44, indicating a potential upside of 9.75%. Ingersoll Rand has a consensus price target of $101.86, indicating a potential upside of 11.31%. Given Ingersoll Rand’s stronger consensus rating and higher probable upside, analysts clearly believe Ingersoll Rand is more favorable than Otis Worldwide.

Insider & Institutional Ownership

88.0% of Otis Worldwide shares are held by institutional investors. Comparatively, 95.3% of Ingersoll Rand shares are held by institutional investors. 0.2% of Otis Worldwide shares are held by insiders. Comparatively, 0.7% of Ingersoll Rand shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Otis Worldwide and Ingersoll Rand”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Otis Worldwide	$14.43 billion	2.49	$1.38 billion	$3.50	26.41
Ingersoll Rand	$7.65 billion	4.68	$581.40 million	$1.45	63.11

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

Volatility and Risk

Otis Worldwide has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, Ingersoll Rand has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.

Summary

Ingersoll Rand beats Otis Worldwide on 10 of the 17 factors compared between the two stocks.

About Otis Worldwide

Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. This segment serves real-estate and building developers, and general contractors. It sells its products directly to customers, as well as through agents and distributors. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. Otis Worldwide Corporation was founded in 1853 and is headquartered in Farmington, Connecticut.

About Ingersoll Rand

Ingersoll Rand Inc. provides various mission-critical air, gas, liquid, and solid flow creation technologies services and solutions worldwide. It operates through two segments, Industrial Technologies and Services, and Precision and Science Technologies. The Industrial Technologies and Services segment designs, manufactures, markets, and services air and gas compression, vacuum, and blower products; fluid transfer equipment and loading systems; and power tools and lifting equipment, including associated aftermarket parts, consumables, air treatment equipment, controls, other accessories, and services under the under the Ingersoll Rand, Gardner Denver, Nash, CompAir, Elmo Rietschle brands, etc. The Precision and Science Technologies segment designs, manufactures, and markets diaphragm, piston, water-powered, peristaltic, gear, vane, progressive cavity, and syringe pumps; and gas boosters, hydrogen compression systems, automated liquid handling systems, odorant injection systems, controls, software, and other related components and accessories for liquid and gas dosing, transfer, dispensing, compression, sampling, pressure management, and flow control in specialized or critical applications under the Air Dimensions, Albin, ARO, Dosatron, Haskel, Ingersoll Rand, LMI, Maximus, Milton Roy, MP, Oberdorfer, Seepex, Thomas, Welch, Williams, YZ, and Zinnser Analytic brand names. This segment's products are used in medical, life sciences, industrial manufacturing, water and wastewater, chemical processing, energy, food and beverage, agriculture, and other markets. It sells through an integrated network of direct sales representatives and independent distributors. The company was formerly known as Gardner Denver Holdings, Inc. and changed its name to Ingersoll Rand Inc. in March 2020. Ingersoll Rand Inc. was founded in 1859 and is headquartered in Davidson, North Carolina.