Critical Contrast: IDEX (NYSE:IEX) vs. CNH Industrial (NYSE:CNH)

CNH Industrial (NYSE:CNH) and IDEX (NYSE:IEX) are both large-cap industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.

Risk & Volatility

CNH Industrial has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, IDEX has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Valuation & Earnings

This table compares CNH Industrial and IDEX”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CNH Industrial	$18.09 billion	0.79	$510.00 million	$0.25	46.42
IDEX	$3.46 billion	5.01	$483.20 million	$6.95	33.83

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

Dividends

CNH Industrial pays an annual dividend of $0.10 per share and has a dividend yield of 0.9%. IDEX pays an annual dividend of $2.92 per share and has a dividend yield of 1.2%. CNH Industrial pays out 40.0% of its earnings in the form of a dividend. IDEX pays out 42.0% 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. IDEX has increased its dividend for 16 consecutive years. IDEX is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

59.9% of CNH Industrial shares are held by institutional investors. Comparatively, 98.0% of IDEX shares are held by institutional investors. 0.2% of CNH Industrial shares are held by company insiders. Comparatively, 0.5% of IDEX shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares CNH Industrial and IDEX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CNH Industrial	1.71%	6.78%	1.24%
IDEX	14.49%	15.69%	9.10%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for CNH Industrial and IDEX, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CNH Industrial	1	6	8	0	2.47
IDEX	0	3	9	0	2.75

CNH Industrial currently has a consensus target price of $13.30, indicating a potential upside of 14.61%. IDEX has a consensus target price of $260.73, indicating a potential upside of 10.90%. Given CNH Industrial’s higher probable upside, equities research analysts plainly believe CNH Industrial is more favorable than IDEX.

Summary

IDEX beats CNH Industrial on 11 of the 17 factors compared between the two stocks.

About CNH Industrial

CNH Industrial NV is an equipment and services company, which develops, manufactures and sells specialized machines and services for the farming and construction industries, and supplies replacement parts and accessories. It operates through the following operating segments: Agriculture, Construction, and Financial Services. The Agriculture segment designs, manufactures, and distributes a full line of farm machinery and implements, including two-wheel and four-wheel drive tractors, crawler tractors, combines, grape and sugar cane harvesters, hay and forage equipment, planting and seeding equipment, soil preparation and cultivation implements and material handling equipment. The Construction segment comprises of a full line of construction equipment including excavators, crawler dozers, graders, wheel loaders, backhoe loaders, skid steer loaders, and compact track loaders. The Financial Services segment offers retail note and lease financing to end-use customers for the purchase of new and used agricultural and construction equipment and components. The company was founded in 1866 and is headquartered in London, the United Kingdom.

About IDEX

IDEX Corporation, together with its subsidiaries, provides applied solutions worldwide. The company operates through three segments: Fluid & Metering Technologies (FMT), Health & Science Technologies (HST), and Fire & Safety/Diversified Products (FSDP). The FMT segment designs, produces, and distributes positive displacement pumps, valves, small volume provers, flow meters, injectors, and other fluid-handling pump modules and systems, as well as flow monitoring and other services for the food, chemical, general industrial, water and wastewater, agricultural, and energy industries. The HST segment designs, produces, and distributes precision fluidics positive displacement pumps, powder and liquid processing technologies, drying systems, micro-precision components, pneumatic components and sealing solutions, high performance molded and extruded sealing components, custom mechanical and shaft seals, engineered hygienic mixers and valves, biocompatible medical devices and implantables, air compressors and blowers, optical components and coatings, laboratory and commercial equipment, and precision photonic solutions. This segment serves food and beverage, life sciences, analytical instruments, pharmaceutical and biopharmaceutical, industrial, semiconductor, automotive/transportation, medical/dental, energy, cosmetics, marine, chemical, wastewater and water treatment, research and aerospace/defense markets. The FSDP segment designs, produces, and distributes firefighting pumps, valves and controls, rescue tools, lifting bags, and other components and systems for the fire and rescue industry; engineered stainless steel banding and clamping devices for various industrial and commercial applications; and precision equipment for dispensing, metering, and mixing colorants and paints used in retail and commercial businesses. IDEX Corporation was incorporated in 1987 and is headquartered in Northbrook, Illinois.