Reviewing Eastern (NASDAQ:EML) & Ituran Location and Control (NASDAQ:ITRN)

Eastern (NASDAQ:EML) and Ituran Location and Control (NASDAQ:ITRN) are both small-cap industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Profitability

This table compares Eastern and Ituran Location and Control’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eastern	2.90%	6.52%	3.59%
Ituran Location and Control	16.15%	27.27%	15.85%

Earnings and Valuation

This table compares Eastern and Ituran Location and Control”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eastern	$248.97 million	0.48	$7.13 million	$1.17	16.83
Ituran Location and Control	$359.02 million	2.80	$57.97 million	$2.91	17.38

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

Dividends

Eastern pays an annual dividend of $0.44 per share and has a dividend yield of 2.2%. Ituran Location and Control pays an annual dividend of $2.00 per share and has a dividend yield of 4.0%. Eastern pays out 37.6% of its earnings in the form of a dividend. Ituran Location and Control pays out 68.7% 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. Ituran Location and Control has increased its dividend for 4 consecutive years. Ituran Location and Control is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Eastern has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, Ituran Location and Control has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Eastern and Ituran Location and Control, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eastern	0	1	0	0	2.00
Ituran Location and Control	0	0	3	0	3.00

Ituran Location and Control has a consensus target price of $60.67, suggesting a potential upside of 19.97%. Given Ituran Location and Control’s stronger consensus rating and higher probable upside, analysts plainly believe Ituran Location and Control is more favorable than Eastern.

Institutional & Insider Ownership

77.0% of Eastern shares are held by institutional investors. Comparatively, 94.8% of Ituran Location and Control shares are held by institutional investors. 17.0% of Eastern shares are held by company insiders. Comparatively, 0.0% of Ituran Location and Control shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Ituran Location and Control beats Eastern on 14 of the 17 factors compared between the two stocks.

About Eastern

The Eastern Company designs, manufactures, and sells engineered solutions to industrial markets in the United States and internationally. The company offers turnkey returnable packaging solutions, which are used in the assembly processes of vehicles, aircraft, and durable goods, as well as in production processes of plastic packaging products, packaged consumer goods, and pharmaceuticals; designs and manufactures blow mold tools and injection blow mold tooling products, and 2-step stretch blow molds and related components for the stretch blow molding industry; and supplies blow molds and change parts to the food, beverage, healthcare, and chemical industries. It also provides rotary latches, compression latches, draw latches, hinges, camlocks, key switches, padlocks, and handles; and development and program management services for custom electromechanical and mechanical systems for original equipment manufacturers (OEMs) and customer applications. In addition, the company designs and manufactures proprietary vision technology for OEMs and aftermarket applications, as well as offers aftermarket components to the heavy- and medium-duty truck, motorhome, and bus markets. The Eastern Company was founded in 1858 and is based in Shelton, Connecticut.

About Ituran Location and Control

Ituran Location and Control Ltd., together with its subsidiaries, provides location based telematics services and machine-to-machine telematics products. It operates through two segments, Telematics Services and Telematics Products. The Telematics services segment offers stolen vehicle recovery and tracking services, which enables to locate, track, and recover stolen vehicles for its subscribers; fleet management services that enable corporate and individual customers to track and manage their vehicles in real time; and locator services that allow customers to protect valuable merchandise and equipment. This segment also delivers on-demand navigation guidance, information, and assistance, including the provision of traffic reports and directions, as well as information on the location of gas stations, car repair shops, post offices, hospitals, and other facilities; and Connected Car, a service platform that includes a back-office application, a telematics device installed in the vehicle, mobile apps for IOS and Android users, and interface using the car infotainment screen, as well as usage based insurance and auto financing services. This segment serves insurance companies and agents, car manufacturers, dealers and importers, cooperative sales channels, and private subscribers. The Telematics Products segment offers Base Site, a radio receiver that includes a processor and a data computation unit to collect and send data to and from transponders, and to control centers; Control Center, a center consisting of software used to collect data from various base sites, conduct location calculations, and transmit location data to various customers and law enforcement agencies; navigation and tracking devices installed in vehicles; and SMART, a portable transmitter installed in vehicles that sends a signal to the base site enabling the location of vehicles, equipment, or an individual. The company was incorporated in 1994 and is headquartered in Azor, Israel.