Critical Survey: ALSTOM/ADR (OTCMKTS:ALSMY) & Franklin Electric (OTCMKTS:FELE)

ALSTOM/ADR (OTCMKTS:ALSMY) and Franklin Electric (NASDAQ:FELE) are both transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Volatility and Risk

ALSTOM/ADR has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500. Comparatively, Franklin Electric has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500.

Earnings and Valuation

This table compares ALSTOM/ADR and Franklin Electric’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ALSTOM/ADR $9.12 billion 1.13 $519.21 million $0.22 20.91
Franklin Electric $1.31 billion 1.84 $95.48 million $2.07 25.37

ALSTOM/ADR has higher revenue and earnings than Franklin Electric. ALSTOM/ADR is trading at a lower price-to-earnings ratio than Franklin Electric, indicating that it is currently the more affordable of the two stocks.

Dividends

ALSTOM/ADR pays an annual dividend of $0.47 per share and has a dividend yield of 10.2%. Franklin Electric pays an annual dividend of $0.62 per share and has a dividend yield of 1.2%. ALSTOM/ADR pays out 213.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franklin Electric pays out 30.0% of its earnings in the form of a dividend. Franklin Electric has raised its dividend for 10 consecutive years.

Institutional and Insider Ownership

0.1% of ALSTOM/ADR shares are owned by institutional investors. Comparatively, 76.6% of Franklin Electric shares are owned by institutional investors. 2.8% of Franklin Electric 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 ALSTOM/ADR and Franklin Electric’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ALSTOM/ADR N/A N/A N/A
Franklin Electric 7.52% 12.73% 8.11%

Analyst Recommendations

This is a summary of current ratings and price targets for ALSTOM/ADR and Franklin Electric, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ALSTOM/ADR 0 5 2 0 2.29
Franklin Electric 0 1 1 0 2.50

Franklin Electric has a consensus price target of $60.00, indicating a potential upside of 14.24%. Given Franklin Electric’s stronger consensus rating and higher probable upside, analysts clearly believe Franklin Electric is more favorable than ALSTOM/ADR.

Summary

Franklin Electric beats ALSTOM/ADR on 13 of the 17 factors compared between the two stocks.

About ALSTOM/ADR

Alstom SA develops and markets systems, equipment, and services for the transport sector in Europe, the Americas, Asia and Pacific, the Middle-East, and Africa. The company offers metros, tramways, tram-trains, suburban trains, regional trains, high-speed trains, and passengers and freight locomotives; and signaling products, such as rail control systems, security and control, trackside, and interlocking products. It is also involved in the design and installation solutions for track laying; the electrification of and power supply to lines; and supply and installation electromechanical equipment. In addition, the company provides urban and main-line rail systems to manage trains, signaling, infrastructure, and services; and maintenance, modernization, parts and repair, and support services. Further, it offers various components, including bogies, motors, traction systems, switchgears, auxiliary converters, traction transformers, feeding systems, and dampers. Alstom SA has a strategic partnership with Cosmotech to develop a new application to improve the efficiency of a rail system. Alstom SA was incorporated in 1992 and is headquartered in Saint-Ouen, France.

About Franklin Electric

Franklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. It operates in three segments: Water Systems, Fueling Systems, and Distribution. The Water Systems segment offers submersible motors, pumps, drives, electronic controls, monitoring devices, and related parts and equipment. Its motors and pumps are used principally for pumping clean water and wastewater in various residential, agricultural, and industrial applications; and electronic drives and controls are used in motors for controlling functionality, as well as providing protection from various hazards, such as electrical surges, over-heating, and dry wells and tanks. The Fueling Systems segment provides pumps, pipes, sumps, fittings, vapor recovery components, electronic controls, monitoring devices, and related parts and equipment primarily for use in submersible fueling system applications. Its fuel pumping systems are used principally in total system solutions for underground gasoline, diesel, and biofuel systems. This segment serves other energy markets, such as power reliability systems, as well as includes intelligent electronic devices for online monitoring of the power utility, hydroelectric, and industrial markets. The Distribution segment sells to and provides pre-sale support and specifications to the installing contractors. It sells products produced by the Water Systems segment and other brands. The company sells its products to wholesale and retail distributors, specialty distributors, original equipment manufacturers, industrial and petroleum equipment distributors, and oil and utility companies through its employee sales force and independent manufacturing representatives. Franklin Electric Co., Inc. was founded in 1944 and is headquartered in Fort Wayne, Indiana.

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