Columbus McKinnon (NASDAQ:CMCO) and Pentair (NYSE:PNR) Critical Review

Pentair (NYSE:PNR) and Columbus McKinnon (NASDAQ:CMCO) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Insider and Institutional Ownership

92.4% of Pentair shares are held by institutional investors. Comparatively, 96.0% of Columbus McKinnon shares are held by institutional investors. 1.3% of Pentair shares are held by insiders. Comparatively, 2.1% of Columbus McKinnon shares are held by 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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Pentair and Columbus McKinnon, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pentair	2	7	7	1	2.41
Columbus McKinnon	1	2	1	1	2.40

Pentair presently has a consensus target price of $76.59, suggesting a potential upside of 9.96%. Columbus McKinnon has a consensus target price of $23.00, suggesting a potential upside of 26.72%. Given Columbus McKinnon’s higher probable upside, analysts clearly believe Columbus McKinnon is more favorable than Pentair.

Profitability

This table compares Pentair and Columbus McKinnon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pentair	15.44%	20.10%	11.25%
Columbus McKinnon	-21.25%	10.02%	2.36%

Earnings & Valuation

This table compares Pentair and Columbus McKinnon”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pentair	$4.18 billion	2.66	$653.80 million	$3.77	18.47
Columbus McKinnon	$1.19 billion	0.44	-$229.54 million	($7.46)	-2.43

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

Risk & Volatility

Pentair has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Columbus McKinnon has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500.

Dividends

Pentair pays an annual dividend of $1.08 per share and has a dividend yield of 1.6%. Columbus McKinnon pays an annual dividend of $0.28 per share and has a dividend yield of 1.5%. Pentair pays out 28.6% of its earnings in the form of a dividend. Columbus McKinnon pays out -3.8% 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 increased its dividend for 7 consecutive years. Pentair is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Pentair beats Columbus McKinnon on 12 of the 17 factors compared between the two stocks.

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.

About Columbus McKinnon

Columbus McKinnon Corporation designs, manufactures, and markets motion solutions for moving, lifting, positioning, and securing materials worldwide. It offers manual, battery, electric, and air hoists; steel, rack, and pinion jacks; winches, hydraulic jacks and tools, trolleys and its clamps, and lifting tables; skates and heavy load moving systems; material handling equipment; mobile, workplace, and jib cranes; crane components and kits; and below-the-hook lifting devices, lifting slings, and lashing systems. The company also provides linear motion products, elevator and mining drives, brakes, radio controls, collision avoidance systems, regenerative drives, AC and DC drive and motor control systems, DC motor and magnet control systems, and conductor bar systems; and underfloor lifting systems, lifting jacks, roof working platforms, hybrid lifting systems, turntables, bogie axle exchange and lifting systems, bogie lift and turn devices, and workshop equipment. In addition, it offers fabric and modular belt, and sanitary, stainless steel conveyors; pallet systems; parts and belts; rotary unions and swivel joints; check valves; accumulation and transfer tables, motion control systems, and steel and flexible chains; hooks, shackles, textile slings, clamps, and load binders; actuators and rotary unions; and push button pendant stations, collision avoidance, and power delivery subsystems. It serves EV production and aerospace, energy and utilities, process industries, industrial automation, construction and infrastructure, food and beverage, entertainment, life sciences, consumer packaged goods, and e-commerce/supply chain/warehousing markets. It offers its products to end users directly, and through distributors, independent crane builders, material handling specialists and integrators, original equipment manufacturers, government agencies, and engineering procurement and construction firms. The company was founded in 1875 and is based in Charlotte, North Carolina.