Critical Analysis: DXP Enterprises (NASDAQ:DXPE) vs. Burnham (OTCMKTS:BURCA)

Burnham (OTCMKTS:BURCA) and DXP Enterprises (NASDAQ:DXPE) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, earnings, analyst recommendations, risk and valuation.

Analyst Recommendations

This is a summary of current recommendations and price targets for Burnham and DXP Enterprises, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Burnham	0	0	0	0	0.00
DXP Enterprises	0	2	2	0	2.50

DXP Enterprises has a consensus target price of $154.00, suggesting a potential downside of 6.97%. Given DXP Enterprises’ stronger consensus rating and higher probable upside, analysts clearly believe DXP Enterprises is more favorable than Burnham.

Insider & Institutional Ownership

1.5% of Burnham shares are held by institutional investors. Comparatively, 74.8% of DXP Enterprises shares are held by institutional investors. 22.0% of DXP Enterprises shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Burnham and DXP Enterprises”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Burnham	$258.11 million	0.32	-$21.45 million	($5.22)	-4.60
DXP Enterprises	$2.02 billion	1.27	$88.68 million	$5.35	30.94

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

Profitability

This table compares Burnham and DXP Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Burnham	-8.95%	13.25%	8.06%
DXP Enterprises	4.27%	18.16%	5.70%

Risk & Volatility

Burnham has a beta of 0.15, indicating that its share price is 85% less volatile than the S&P 500. Comparatively, DXP Enterprises has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Summary

DXP Enterprises beats Burnham on 13 of the 14 factors compared between the two stocks.

About Burnham

Burnham Holdings, Inc. designs, manufactures, and sells boilers and related heating, ventilation, and air conditioning products and accessories for residential, commercial, and industrial applications in the United States and internationally. Its residential hydronic heating products include cast iron, stainless steel, and steel boilers; cast iron and steel heat distribution products; radiators; and warm air furnaces and central air conditioning systems for the residential heating and cooling markets, including units for the manufactured housing industry. The company's commercial and industrial heating products comprise a range of cast iron, stainless steel, fire tube, water tube, copper tube boilers, and water heaters; and boiler room accessories that are used for various applications, such as military bases, multi-unit residential buildings, health care, government, education, and hospital facilities. The company sells its residential products through wholesale distributors to builders, heating contractors, fuel dealers, and utilities for resale to end-use customers; and commercial products primarily through independent sales representatives, directly to contractors, or end users. Burnham Holdings, Inc. is based in Lancaster, Pennsylvania.

About DXP Enterprises

DXP Enterprises, Inc., together with its subsidiaries, engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services in the United States and Canada. It operates through three segments: Service Centers (SC), Supply Chain Services (SCS), and Innovative Pumping Solutions (IPS). The SC segment offers MRO products, equipment, and integrated services, including technical expertise and logistics services. It offers a range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products, and safety services categories. This segment serves customers in the oil and gas, food and beverage, petrochemical, transportation, other general industrial, mining, construction, chemical, municipal, agriculture, and pulp and paper industries. The SCS segment manages procurement and inventory vinventory optimization and management, storeroom management, transaction consolidation and control, vendor oversight and procurement cost optimization, productivity improvement, and customized reporting services. Its programs include SmartAgreement, a procurement solution for various MRO categories; SmartBuy, an on-site or centralized MRO procurement solution; SmartSource, an on-site procurement and storeroom management solution; SmartStore, an e-Catalog solution; SmartVend, an industrial dispensing solution; and SmartServ, an integrated service pump solution. The IPS segment fabricates and assembles custom-made pump packages; remanufactures pumps; and manufactures branded private label pumps. DXP Enterprises, Inc. was founded in 1908 and is based in Houston, Texas.