Head to Head Review: Esterline (ESL) and Fortive (FTV)

Esterline (NYSE: ESL) and Fortive (NYSE:FTV) are both aerospace companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.

Dividends

Fortive pays an annual dividend of $0.28 per share and has a dividend yield of 0.4%. Esterline does not pay a dividend. Fortive pays out 9.7% of its earnings in the form of a dividend.

Insider & Institutional Ownership

97.0% of Esterline shares are owned by institutional investors. Comparatively, 81.1% of Fortive shares are owned by institutional investors. 1.4% of Esterline shares are owned by company insiders. Comparatively, 12.1% of Fortive shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Esterline and Fortive’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Esterline $2.00 billion 1.13 $111.55 million $4.36 17.61
Fortive $6.66 billion 4.08 $1.04 billion $2.89 26.94

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

Analyst Ratings

This is a summary of current ratings and price targets for Esterline and Fortive, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Esterline 4 5 0 0 1.56
Fortive 0 6 5 0 2.45

Esterline presently has a consensus price target of $79.25, indicating a potential upside of 3.19%. Fortive has a consensus price target of $80.00, indicating a potential upside of 2.74%. Given Esterline’s higher probable upside, analysts plainly believe Esterline is more favorable than Fortive.

Profitability

This table compares Esterline and Fortive’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Esterline 2.74% 6.08% 3.52%
Fortive 16.12% 29.86% 11.17%

Risk & Volatility

Esterline has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, Fortive has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.

Summary

Fortive beats Esterline on 11 of the 16 factors compared between the two stocks.

About Esterline

Esterline Technologies Corporation designs, manufactures, and markets engineered products and systems primarily for aerospace and defense customers in the United States and internationally. It operates through three segments: Avionics & Controls, Sensors & Systems, and Advanced Materials. The Avionics & Controls segment offers global positioning systems, head-up displays, enhanced vision systems, and electronic flight management systems for control and display applications; lighted push-button and rotary switches, keyboards, lighted indicators, panels, and displays; and control sticks, grips, wheels, and switching systems. This segment also provides military personal communication equipment, primarily headsets, handsets, and field communications equipment; keyboards, keypads, and input devices that integrate cursor control devices, barcode scanners, displays, video, and voice activation and touch screens; and instruments for point-of-use and point-of-care diagnostics. The Sensors & Systems segment develops and manufactures high-precision temperature, pressure, and speed sensors; electrical interconnection systems; electrical power switching, control and data communication devices, and other related systems; and planet probe interconnectors, launcher umbilicals, and composite connectors. The Advanced Materials segment develops and manufactures silicone rubber and other elastomer products, such as clamping devices, thermal fire barrier insulation products, sealing systems, and tubing and coverings; lightweight metallic insulation systems; thermal protection products; and molded fiber cartridge cases, mortar increments, igniter tubes, and other combustible ordnance components. The company markets and sells its products through direct internal sales, manufacturer representatives, and distributors. Esterline Technologies Corporation was founded in 1967 and is headquartered in Bellevue, Washington.

About Fortive

Fortive Corporation designs, develops, manufactures, markets, and services professional and engineered products, software, and services worldwide. Its Professional Instrumentation segment provides test tools, and thermal imaging and calibration equipment for electrical, industrial, electronic, and calibration applications; online condition-based monitoring equipment; portable gas detection equipment, consumables, and software as a service offerings; subscription-based technical, analytical, and compliance services; and maintenance management software for critical infrastructure in utility, industrial, energy, construction, public safety, mining, and healthcare applications. This segment also provides product realization services and products that help developers and engineers across the end-to-end product creation cycle from concepts to finished products; materials components; and devices that sense, monitor, and control operational or manufacturing variables. This segment markets its products and services under the FLUKE, FLUKE BIOMEDICAL, FLUKE NETWORKS, INDUSTRIAL SCIENTIFIC, LANDAUER, QUALITROL, INVETECH, KEITHLEY, PACIFIC SCIENTIFIC ENERGETIC MATERIALS COMPANY, SONIX, and TEKTRONIX brands. Its Industrial Technologies segment offers solutions and services for use in fuel dispensing, remote fuel management, point-of-sale and payment systems, environmental compliance, vehicle tracking, and fleet and traffic management under the ANGI, GASBOY, GILBARCO, GILBARCO AUTOTANK, ORPAK, and VEEDER-ROOT brands; and various electromechanical and electronic motion control products, mechanical components, and supplemental braking systems for commercial vehicles under the DYNAPAR, HENGSTLER, JAKE BRAKE, KOLLMORGEN, PORTESCAP, and THOMSON brands. It also offers professional tools, toolboxes, and automotive diagnostic equipment under the MATCO brand; and wheel service equipment under the COATS brand. The company was incorporated in 2016 and is headquartered in Everett, Washington.

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