Rockwell Automation (ROK) & Cubic (CUB) Head-To-Head Contrast

Rockwell Automation (NYSE: ROK) and Cubic (NYSE:CUB) are both industrial products companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Rockwell Automation 6.34% 42.38% 13.52%
Cubic -1.44% -1.83% -0.94%

Volatility & Risk

Rockwell Automation has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Cubic has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Institutional and Insider Ownership

73.1% of Rockwell Automation shares are held by institutional investors. Comparatively, 94.4% of Cubic shares are held by institutional investors. 1.7% of Rockwell Automation shares are held by insiders. Comparatively, 7.9% of Cubic shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Rockwell Automation pays an annual dividend of $3.68 per share and has a dividend yield of 2.2%. Cubic pays an annual dividend of $0.27 per share and has a dividend yield of 0.4%. Rockwell Automation pays out 54.4% of its earnings in the form of a dividend. Cubic pays out -65.9% 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. Rockwell Automation has increased its dividend for 8 consecutive years. Rockwell Automation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rockwell Automation 0 12 2 0 2.14
Cubic 0 2 4 0 2.67

Rockwell Automation currently has a consensus price target of $188.17, suggesting a potential upside of 14.29%. Cubic has a consensus price target of $67.20, suggesting a potential upside of 6.41%. Given Rockwell Automation’s higher probable upside, analysts plainly believe Rockwell Automation is more favorable than Cubic.

Valuation and Earnings

This table compares Rockwell Automation and Cubic’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rockwell Automation $6.31 billion 3.28 $825.70 million $6.76 24.36
Cubic $1.49 billion 1.16 -$11.20 million ($0.41) -154.02

Rockwell Automation has higher revenue and earnings than Cubic. Cubic 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 Cubic on 12 of the 17 factors compared between the two stocks.

Rockwell Automation Company Profile

Rockwell Automation Inc. provides industrial automation and information solutions worldwide. It operates in two segments, Architecture & Software; and Control Products & Solutions. The Architecture & Software segment provides control platforms, including controllers, electronic operator interface devices, electronic input/output devices, communication and networking products, and industrial computers that perform multiple control disciplines and monitoring of applications, such as discrete, batch and continuous process, drives control, motion control, and machine safety control. This segment also offers configuration and visualization software, which is used to operate and supervise control platforms, process control software, and manufacturing execution systems and information solution software to enhance productivity and meet regulatory requirements; and other products comprising sensors, machine safety components, and linear motion control products. The Control Products & Solutions segment offers low and medium voltage electro-mechanical and electronic motor starters, motor and circuit protection devices, AC/DC variable frequency drives, push buttons, signaling devices, termination and protection devices, relays, and timers; and various packaged solutions, such as configured drives and motor control centers to automation and information solutions. This segment also offers life-cycle support services, such as technical support and repair, asset management, training, maintenance, and safety and network consulting services. The company's brands include Allen-Bradley and Rockwell Software. It serves food and beverage, home and personal care, life sciences, automotive and tire, oil and gas, and mining and metal industries through independent distributors and direct sales force in the United States, Canada, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. Rockwell Automation Inc. was founded in 1903 and is headquartered in Milwaukee, Wisconsin.

Cubic Company Profile

Cubic Corporation provides various integrated solutions worldwide. Its solutions enhance the situational understanding for transportation, defense, and training customers, as well as for command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) customers. The company operates through four segments: Cubic Transportation Systems (CTS), Cubic Global Defense Systems (CGD Systems), Cubic Mission Solutions (CMS), and Cubic Global Defense Services (CGD Services). The CTS segment integrates payment and information technology and services for intelligent travel solutions. It delivers integrated systems for transportation and traffic management; and tools for travelers to choose the smartest and easiest way to travel and pay for their journeys, as well as enables transportation authorities and agencies to manage demand across the entire transportation network. The CGD Systems segment supplies live, virtual, constructive, and game-based training solutions to the U.S. Department of Defense, other U.S. government agencies, and allied nations. The CMS segment offers networked C4ISR solutions for defense, intelligence, security, and commercial missions. The CGD Services segment provides specialized military, security force, and intelligence support services to the U.S. government and allied nations. The company was incorporated in 1949 and is headquartered in San Diego, California.

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