Critical Contrast: Worthington Enterprises (NYSE:WOR) and Zurn Elkay Water Solutions Cor (NYSE:ZWS)

Zurn Elkay Water Solutions Cor (NYSE:ZWS) and Worthington Enterprises (NYSE:WOR) are both mid-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Volatility and Risk

Zurn Elkay Water Solutions Cor has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Worthington Enterprises has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.

Earnings and Valuation

This table compares Zurn Elkay Water Solutions Cor and Worthington Enterprises”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zurn Elkay Water Solutions Cor	$1.70 billion	4.58	$198.00 million	$1.62	28.92
Worthington Enterprises	$1.38 billion	2.12	$156.09 million	$3.31	18.11

Zurn Elkay Water Solutions Cor has higher revenue and earnings than Worthington Enterprises. Worthington Enterprises is trading at a lower price-to-earnings ratio than Zurn Elkay Water Solutions Cor, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Zurn Elkay Water Solutions Cor and Worthington Enterprises, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zurn Elkay Water Solutions Cor	0	3	5	1	2.78
Worthington Enterprises	0	1	1	0	2.50

Zurn Elkay Water Solutions Cor presently has a consensus target price of $57.44, suggesting a potential upside of 22.60%. Worthington Enterprises has a consensus target price of $75.00, suggesting a potential upside of 25.10%. Given Worthington Enterprises’ higher probable upside, analysts plainly believe Worthington Enterprises is more favorable than Zurn Elkay Water Solutions Cor.

Dividends

Zurn Elkay Water Solutions Cor pays an annual dividend of $0.44 per share and has a dividend yield of 0.9%. Worthington Enterprises pays an annual dividend of $0.80 per share and has a dividend yield of 1.3%. Zurn Elkay Water Solutions Cor pays out 27.2% of its earnings in the form of a dividend. Worthington Enterprises pays out 24.2% 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. Zurn Elkay Water Solutions Cor has raised its dividend for 3 consecutive years. Worthington Enterprises is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

83.3% of Zurn Elkay Water Solutions Cor shares are held by institutional investors. Comparatively, 51.6% of Worthington Enterprises shares are held by institutional investors. 2.4% of Zurn Elkay Water Solutions Cor shares are held by company insiders. Comparatively, 2.5% of Worthington Enterprises shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Zurn Elkay Water Solutions Cor and Worthington Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zurn Elkay Water Solutions Cor	15.45%	18.01%	10.74%
Worthington Enterprises	11.50%	16.71%	9.29%

Summary

Zurn Elkay Water Solutions Cor beats Worthington Enterprises on 12 of the 18 factors compared between the two stocks.

About Zurn Elkay Water Solutions Cor

Zurn Elkay Water Solutions Corporation engages in design, procurement, manufacture, and marketing of water management solutions in the United States, Canada, and internationally. It offers water safety and control products, such as backflow preventers, fire system valves, pressure reducing valves, thermostatic mixing valves, PEX pipings, fittings, and installation tools under the Zurn and Wilkins brand names. The company also provides flow systems products comprising point drains, hydrants, fixture carrier systems, chemical drainage systems; and interceptors and separators, acid neutralization systems, and remote monitoring systems under the Zurn and Green Turtle brands. In addition, it develops, manufactures, and markets remote tank monitoring devices, alarms, software, and services. Further, the company offers sensor-operated flush valves under the AquaSense, Aquaflush, and AquaVantage brands; heavy-duty commercial faucets under the AquaSpec brand; water conserving fixtures under the EcoVantage and Zurn One brands; stainless steel products under the Just Manufacturing brand name, which include stainless steel sinks and plumbing fixtures, and various types of sinks, as well as drinking water dispensing and filtration products under the Elkay and Halsey Taylor brands. It distributes to institutional, commercial, waterworks, and residential end markets through independent sales representatives, plumbing wholesalers, and industry-specific distributors in the waterworks, foodservice, industrial, janitorial, sanitation, and sitework industries. The company was formerly known as Zurn Water Solutions Corporation and changed its name to Zurn Elkay Water Solutions Corporation in July 2022. Zurn Elkay Water Solutions Corporation was incorporated in 1892 and is headquartered in Milwaukee, Wisconsin.

About Worthington Enterprises

Worthington Enterprises, Inc. operates as an industrial manufacturing company. It operates through three segments: Building Products, Consumer Products, and Sustainable Energy Solutions. The Building Products segment sells refrigerant and LPG cylinders, well water and expansion tanks, fire suppression tanks, chemical tanks, and foam and adhesive tanks for gas producers, and distributors. The Consumer Products segment provides products in the tools, outdoor living, and celebrations end markets. Its products include propane-filled cylinders for torches, camping stoves and other applications, LPG cylinders, handheld torches, helium-filled balloon kits, specialized hand tools and instruments, and drywall tools and accessories This segment sells its products primarily to mass merchandisers, retailers, and distributors under the Coleman, Bernzomatic, Balloon Time, Mag-Torch, General, Garden-Weasel, Pactool International, Hawkeye, Worthington Pro Grade, and Level5 brands. The Sustainable Energy Solutions segment sells onboard fueling systems and services, as well as gas containment solutions and services for storage, transport, and distribution of industrial gases. It includes high pressure and acetylene cylinders for life support systems and alternative fuel cylinders used to hold CNG and hydrogen for automobiles, buses, and light-duty trucks. The company was formerly known as Worthington Industries, Inc. Worthington Enterprises, Inc. was founded in 1955 and is headquartered in Columbus, Ohio.