Comparing Pentair (NYSE:PNR) and AB SKF (OTCMKTS:SKFRY)

AB SKF (OTCMKTS:SKFRY) and Pentair (NYSE:PNR) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitability.

Dividends

AB SKF pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. Pentair pays an annual dividend of $1.08 per share and has a dividend yield of 1.9%. AB SKF pays out 56.6% of its earnings in the form of a dividend. Pentair pays out 27.1% 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. Pentair has raised its dividend for 7 consecutive years.

Volatility & Risk

AB SKF has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Pentair has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Earnings and Valuation

This table compares AB SKF and Pentair”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AB SKF	$9.36 billion	1.35	$401.34 million	$1.06	26.24
Pentair	$4.18 billion	2.14	$653.80 million	$3.98	14.04

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for AB SKF and Pentair, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AB SKF	1	4	1	0	2.00
Pentair	4	5	9	0	2.28

Pentair has a consensus price target of $87.19, indicating a potential upside of 56.02%. Given Pentair’s stronger consensus rating and higher probable upside, analysts clearly believe Pentair is more favorable than AB SKF.

Profitability

This table compares AB SKF and Pentair’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AB SKF	5.05%	13.27%	6.91%
Pentair	16.24%	20.62%	11.44%

Institutional and Insider Ownership

0.1% of AB SKF shares are held by institutional investors. Comparatively, 92.4% of Pentair shares are held by institutional investors. 1.3% of Pentair shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Pentair beats AB SKF on 13 of the 17 factors compared between the two stocks.

About AB SKF

AB SKF (publ) designs, manufactures, and sells bearings and units, seals, lubrication systems, condition monitoring, and services worldwide. It operates in two segments, Industrial and Automotive. The company offers rolling, mounted and housings, super-precision, slewing, plain, magnetic, and thin section bearings; industrial and automotive seals; lubricants, manual lubrication tools, lubricators, automatic lubrication systems, and lubrication system components; maintenance products, such as hydraulic, mechanical, and alignment tools, as well as heaters; belts, pulleys, chains, sprockets, bushings and hubs, couplings, and bolts and tightening systems; condition monitoring systems; test and measuring equipment, such as waviness and roundness analyzers, noise and vibration testers, and grease test rigs, as well as calibration with traceability, machine training and support, and upgrades and refurbishment services; and vehicle aftermarket products. It also provides application engineering services consisting of technical consultancy, numerical simulation and design, and root cause analysis; asset management services, such as assessment and benchmarking, maintenance strategy review, spare parts and inventory management, and lubrication management; condition-based maintenance, including vibration analysis and diagnostics, thermography, lubrication analysis, and condition monitoring system installation; mechanical maintenance comprising mounting and dismounting, precision alignment, and balancing; remanufacturing and customization; and training solutions, which include instructor-led training, e-learning courses, and webinar recordings. The company serves the aerospace, agriculture, automotive, construction, food and beverage, general machinery, machine tools, marine, material handling, metals, mining, mineral processing, ocean energy, pulp and paper, railways, and wind industries. AB SKF (publ) was incorporated in 1907 and is headquartered in Gothenburg, Sweden.

About Pentair

Pentair plc provides various water solutions in the United States, Western Europe, China, Eastern Europe, Latin America, the Middle East, Southeast Asia, Australia, Canada, and Japan. The company operates through three segments: Flow, Water Solutions, and Pool. The Flow segment designs, manufactures, and sells fluid treatment and pump products and systems, including pressure vessels, gas recovery solutions, membrane bioreactors, wastewater reuse systems and advanced membrane filtration, separation systems, water disposal pumps, water supply pumps, fluid transfer pumps, turbine pumps, solid handling pumps, and agricultural spray nozzles for fluid delivery, ion exchange, desalination, food and beverage, separation technologies in the oil and gas industry, residential and municipal wells, water treatment, wastewater solids handling, pressure boosting, circulation and transfer, fire suppression, flood control, agricultural irrigation, and crop spray in residential, commercial, and industrial markets. The Water Solutions segment provides commercial and residential water treatment products and systems, including pressure tanks, control valves, activated carbon products, commercial ice machines, conventional filtration products, and point-of-entry and point-of-use water treatment systems, as well as installation and preventative services for use in residential whole home water filtration, drinking water filtration, and water softening solutions, as well as commercial total water management and filtration in foodservice operations. The Pool segment provides residential and commercial pool equipment and accessories comprising pumps, filters, heaters, lights, automatic controls, automatic cleaners, maintenance equipment, and pool accessories for applications in residential and commercial pool maintenance, pool repair, renovation, service, and construction and aquaculture solutions. Pentair plc was founded in 1966 and is headquartered in London, the United Kingdom.