Icahn Enterprises (NASDAQ:IEP) & ITT (NYSE:ITT) Financial Review

Icahn Enterprises (NASDAQ:IEP) and ITT (NYSE:ITT) are both multi-sector conglomerates 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.

Institutional and Insider Ownership

87.1% of Icahn Enterprises shares are held by institutional investors. Comparatively, 91.6% of ITT shares are held by institutional investors. 90.1% of Icahn Enterprises shares are held by company insiders. Comparatively, 0.9% of ITT 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.

Profitability

This table compares Icahn Enterprises and ITT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Icahn Enterprises	-2.98%	-8.22%	-1.94%
ITT	12.39%	17.74%	10.12%

Dividends

Icahn Enterprises pays an annual dividend of $2.00 per share and has a dividend yield of 24.6%. ITT pays an annual dividend of $1.54 per share and has a dividend yield of 0.7%. Icahn Enterprises pays out -333.3% of its earnings in the form of a dividend. ITT pays out 25.2% 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. ITT has raised its dividend for 10 consecutive years. Icahn Enterprises is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Icahn Enterprises has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500. Comparatively, ITT has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.

Valuation and Earnings

This table compares Icahn Enterprises and ITT”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Icahn Enterprises	$9.30 billion	0.56	-$299.00 million	($0.60)	-13.57
ITT	$3.94 billion	4.97	$488.00 million	$6.11	35.86

ITT has lower revenue, but higher earnings than Icahn Enterprises. Icahn Enterprises is trading at a lower price-to-earnings ratio than ITT, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for Icahn Enterprises and ITT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Icahn Enterprises	1	1	0	0	1.50
ITT	0	1	10	0	2.91

ITT has a consensus target price of $225.55, suggesting a potential upside of 2.93%. Given ITT’s stronger consensus rating and higher probable upside, analysts plainly believe ITT is more favorable than Icahn Enterprises.

Summary

ITT beats Icahn Enterprises on 13 of the 17 factors compared between the two stocks.

About Icahn Enterprises

Icahn Enterprises L.P., through its subsidiaries, engages in the investment, energy, automotive, food packaging, real estate, home fashion, and pharma businesses in the United States and Internationally. The Investment segment invests its proprietary capital through various private investment funds. This segment provides investment advisory and other related services. The Energy segment refines and markets transportation fuels in the form of gasoline and diesel fuels, as well as renewable diesel; and manufactures nitrogen fertilizers in the form of urea ammonium nitrate and ammonia. The Automotive segment sells automotive parts and materials, and retailed merchandise; offers automotive repair and maintenance services; and leases real estate properties. The Food Packaging segment produces and sells cellulosic, fibrous, and plastic casings that are used to prepare and package processed meat products. The Real Estate segment is involved in the leasing of land, retail, office, and industrial properties; the development and sale of single-family homes; and the operation of country clubs. The Home Fashion segment manufactures, sources, markets, distributes, and sells home fashion consumer products. The Pharma segment offers pharmaceutical products and services. The company was incorporated in 1987 and is headquartered in Sunny Isles Beach, Florida.

About ITT

ITT Inc., together with its subsidiaries, manufactures and sells engineered critical components and customized technology solutions for the transportation, industrial, and energy markets in the United States and internationally. The Motion Technologies segment manufactures brake pads, shims, shock absorbers, and energy absorption components; and sealing technologies primarily for the transportation industry, including passenger cars, trucks, light- and heavy-duty commercial and military vehicles, buses, and trains. This segment sells its products under ITT Friction Technologies, KONI, Wolverine Advanced Materials, Axtone, Novitek, and GALT. brand names. The Industrial Process segment provides industrial pumps, valves, and plant optimization and remote monitoring systems and services; and aftermarket solutions, such as replacement parts and services. It serves various customers in industries, such as chemical, energy, mining, and other industrial process markets. This segment sells its products under Goulds Pumps, Bornemann, Engineered Valves, PRO Services, C'treat, i-ALERT, Rheinhütte Pumpen, and Habonim brand names. The Connect & Control Technologies segment designs and manufactures a range of engineered connectors and specialized products for critical applications supporting various markets, including aerospace and defense, industrial, transportation, medical, and energy. This segment provides connector products, such as circular, rectangular, radio frequency, fiber optic, D-sub miniature, micro-miniature, and cable assemblies; and control products consist of highly engineered actuation, flow control, energy absorption, environmental control, and composite component solutions for the aerospace, defense, and industrial markets under Cannon, VEAM, BIW Connector Systems, Aerospace Controls, Enidine, Compact Automation, Neo-Dyn Process Controls, Conoflow, and Micro-Mode brand names. The company was incorporated in 1920 and is headquartered in Stamford, Connecticut.