IHI (OTCMKTS:IHICY) vs. Ferguson (NYSE:FERG) Head to Head Review

Ferguson (NYSE:FERG) and IHI (OTCMKTS:IHICY) are both large-cap industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, analyst recommendations and profitability.

Dividends

Ferguson pays an annual dividend of $3.56 per share and has a dividend yield of 1.6%. IHI pays an annual dividend of $0.07 per share and has a dividend yield of 0.4%. Ferguson pays out 41.4% of its earnings in the form of a dividend. IHI pays out 7.5% 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.

Earnings and Valuation

This table compares Ferguson and IHI”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferguson	$31.32 billion	1.40	$1.86 billion	$8.60	26.32
IHI	$10.92 billion	1.67	$1.06 billion	$0.93	18.11

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

Insider and Institutional Ownership

82.0% of Ferguson shares are held by institutional investors. 0.2% of Ferguson shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Ferguson has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, IHI has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Ferguson and IHI, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferguson	0	6	11	1	2.72
IHI	0	2	0	0	2.00

Ferguson currently has a consensus price target of $277.21, indicating a potential upside of 22.45%. Given Ferguson’s stronger consensus rating and higher probable upside, analysts plainly believe Ferguson is more favorable than IHI.

Profitability

This table compares Ferguson and IHI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ferguson	6.98%	38.81%	12.83%
IHI	N/A	N/A	N/A

Summary

Ferguson beats IHI on 15 of the 17 factors compared between the two stocks.

About Ferguson

Ferguson Enterprises Inc. distributes plumbing and heating products in North America. The company provides expertise, solutions, and products, including infrastructure, plumbing, appliances, fire, and fabrication, as well as heating, ventilation, and air conditioning (HVAC) to residential and non-residential customers. It also supplies specialist water and wastewater treatment products to residential, commercial, and infrastructure contractors, as well as supplies pipe, valves, and fittings solutions to industrial customers. In addition, it offers customized solutions, such as virtual design, fabrication, valve actuation, pre-assembly, kitting, installation, and project management services, as well as after-sales support that comprises warranty, credit, project-based billing, returns and maintenance, and repair and operations support. The company sells its products through a network of distribution centers, branches, counter service and specialist sales associates, showroom consultants, and e-commerce channels. Ferguson Enterprises Inc. was founded in 1953 and is headquartered in Newport News, Virginia.

About IHI

IHI Corporation designs and builds engineering solutions in Japan and internationally. The company operates through four segments: Resources, Energy and Environment; Social Infrastructure; Industrial Systems and General-Purpose Machinery; and Aero Engine, Space and Defense. The company engages in the manufacturing, sale, and provision of services related to power systems plants for land use and power systems for chips; carbon solutions comprising boilers and storage facilities; components for nuclear power plants; bridges and water gates, transport systems, shield systems, and concrete construction materials; vehicular turbochargers, parking, heat treatment and surface engineering; transport machineries; logistics and industrial systems; and rotating machineries comprising compressors, separation systems, and turbochargers for ships. It also offers 3D laser radars, X-ray inspection systems, monitoring equipment, oil leak monitors, vibration control systems and seismic isolation floor systems, and disaster prevention equipment; environmental monitoring; cryogenic products, material handling systems, steelmaking equipment, pulp and paper machinery, agricultural machinery, life associated equipment; aero engines; rocket, space utilization, defense, and traffic control systems; and communication, electronic, electric measuring, information processing machines, and other instruments and equipment. In addition, the company sells and rents real estate. The company was formerly known as Ishikawajima-Harima Heavy Industries Co., Ltd and changed its name to IHI Corporation in 2007. IHI Corporation was founded in 1853 and is headquartered in Tokyo, Japan.