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Rockwell Automation (NYSE: ROK) and Anixter International (NYSE:AXE) are both mid-cap industrials companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Risk and Volatility

Rockwell Automation has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, Anixter International has a beta of 2.03, meaning that its stock price is 103% more volatile than the S&P 500.

Insider and Institutional Ownership

73.0% of Rockwell Automation shares are owned by institutional investors. Comparatively, 87.1% of Anixter International shares are owned by institutional investors. 1.7% of Rockwell Automation shares are owned by company insiders. Comparatively, 14.7% of Anixter International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Rockwell Automation and Anixter International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rockwell Automation 13.08% 38.67% 12.32%
Anixter International 1.86% 12.52% 4.14%

Dividends

Rockwell Automation pays an annual dividend of $3.34 per share and has a dividend yield of 1.8%. Anixter International does not pay a dividend. Rockwell Automation pays out 52.5% of its earnings in the form of a dividend. Rockwell Automation has increased its dividend for 7 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings for Rockwell Automation and Anixter International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rockwell Automation 1 10 3 0 2.14
Anixter International 0 4 1 0 2.20

Rockwell Automation presently has a consensus target price of $161.73, indicating a potential downside of 15.09%. Anixter International has a consensus target price of $86.00, indicating a potential upside of 18.95%. Given Anixter International’s stronger consensus rating and higher probable upside, analysts clearly believe Anixter International is more favorable than Rockwell Automation.

Earnings and Valuation

This table compares Rockwell Automation and Anixter International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rockwell Automation $6.31 billion 3.88 $825.70 million $6.36 29.95
Anixter International $7.62 billion 0.32 $120.50 million $4.29 16.85

Rockwell Automation has higher earnings, but lower revenue than Anixter International. Anixter International is trading at a lower price-to-earnings ratio than Rockwell Automation, indicating that it is currently the more affordable of the two stocks.

Summary

Rockwell Automation beats Anixter International on 10 of the 17 factors compared between the two stocks.

About Rockwell Automation

Rockwell Automation, Inc. (Rockwell Automation) is a provider of industrial automation power, control and information solutions for manufacturers. The Company operates through two segments: Architecture & Software and Control Products & Solutions. The Architecture & Software segment contains various hardware, software and communication components of the Company’s integrated control and information architecture capable of controlling the customer’s industrial processes and connecting with their manufacturing enterprise. Architecture & Software has a portfolio of products, including Control platforms that perform multiple control disciplines and monitoring of applications, including discrete, batch and continuous process, drives control, motion control and machine safety control. The Control Products & Solutions segment portfolio includes low and medium voltage electro-mechanical and electronic motor starters, signaling devices, termination and protection devices, relays and timers.

About Anixter International

Anixter International Inc. is engaged in the distribution of enterprise cabling and security solutions, electrical and electronic wire and cable products and utility power solutions. The Company operates through three segments: Network & Security Solutions (NSS), Electrical & Electronic Solutions (EES), and Utility Power Solutions (UPS). The NSS segment’s product portfolio includes access control, power, cable management, wireless, professional audio/video, voice and networking switches, and other ancillary products. The EES segment’s product portfolio includes electrical and electronic wire and cable, shipboard cable, support and supply products, low-voltage cable, instrumentation cable, industrial communication and control products, security cable, connectors, industrial Ethernet switches, and voice and data cable. The UPS segment supplies electrical transmission and distribution products, power plant maintenance, repair and operations supplies, and smart-grid products.

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