Reviewing Enersys (NYSE:ENS) & AZZ (NYSE:AZZ)

AZZ (NYSE:AZZ) and Enersys (NYSE:ENS) are both mid-cap industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Earnings & Valuation

This table compares AZZ and Enersys”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AZZ	$1.58 billion	2.05	$128.83 million	$10.40	10.34
Enersys	$3.62 billion	1.50	$363.73 million	$8.55	17.17

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

Institutional & Insider Ownership

90.9% of AZZ shares are owned by institutional investors. Comparatively, 94.9% of Enersys shares are owned by institutional investors. 1.8% of AZZ shares are owned by insiders. Comparatively, 0.9% of Enersys shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

AZZ has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, Enersys has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Profitability

This table compares AZZ and Enersys’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AZZ	19.69%	15.01%	7.78%
Enersys	9.05%	22.48%	10.42%

Analyst Recommendations

This is a breakdown of recent ratings for AZZ and Enersys, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AZZ	0	3	6	1	2.80
Enersys	0	0	5	1	3.17

AZZ presently has a consensus target price of $116.33, indicating a potential upside of 8.15%. Enersys has a consensus target price of $126.00, indicating a potential downside of 14.19%. Given AZZ’s higher possible upside, research analysts clearly believe AZZ is more favorable than Enersys.

Dividends

AZZ pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Enersys pays an annual dividend of $1.05 per share and has a dividend yield of 0.7%. AZZ pays out 7.7% of its earnings in the form of a dividend. Enersys pays out 12.3% 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. Enersys has raised its dividend for 2 consecutive years. AZZ is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

AZZ beats Enersys on 9 of the 17 factors compared between the two stocks.

About AZZ

AZZ Inc. provides hot-dip galvanizing and coil coating solutions in North America. It offers metal finishing solutions for corrosion protection, including hot-dip galvanizing, spin galvanizing, powder coating, anodizing, and plating to steel fabrication and other industries, as well as to fabricators or manufacturers that provide services to the transmission and distribution, bridge and highway, petrochemical, and general industrial markets; and original equipment manufacturers. It also provides aesthetic and corrosion protective coatings and related value-added services for steel and aluminum coil primarily serving the construction; appliance; heating, ventilation, and air conditioning; container; transportation; and other end markets. The company was incorporated in 1956 and is headquartered in Fort Worth, Texas.

About Enersys

EnerSys engages in the provision of stored energy solutions for industrial applications worldwide. It operates in four segments: Energy Systems, Motive Power, Specialty, and New Ventures. The Energy Systems segment offers uninterruptible power systems (UPS) applications for computer and computer-controlled systems, as well as telecommunications systems; switchgear and electrical control systems used in industrial facilities and electric utilities, large-scale energy storage, and energy pipelines; integrated power solutions and services to broadband, telecom, data center, and renewable and industrial customers; and thermally managed cabinets and enclosures for electronic equipment and batteries. The Motive Power segment provides power solutions for electric industrial forklifts used in manufacturing, warehousing, and other material handling applications, as well as automated guided vehicles, mining equipment, and diesel locomotive starting and other rail equipment. The Specialty offers batteries for starting, lighting, and ignition applications in automotive and over-the-road trucks; and energy solutions for satellites, spacecraft, commercial aircraft, military land vehicles, aircraft, submarines, ships, and other tactical vehicles, as well as medical devices and equipment. The New Venture segment provides energy storage and management systems for demand charge reduction, utility back-up power, and dynamic fast charging for electric vehicles. The company also offers battery chargers, power equipment, battery accessories, and outdoor cabinet enclosures, as well as related after-market and customer-support services for industrial batteries. It sells its products through a network of distributors, independent representatives, and internal sales forces. The company was formerly known as Yuasa, Inc. and changed its name to EnerSys in January 2001. EnerSys was founded in 1991 and is headquartered in Reading, Pennsylvania.