Comparing Japan Steel Works (OTCMKTS:JPSWY) and Otis Worldwide (NYSE:OTIS)

Japan Steel Works (OTCMKTS:JPSWY) and Otis Worldwide (NYSE:OTIS) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Profitability

This table compares Japan Steel Works and Otis Worldwide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Japan Steel Works	7.01%	8.57%	4.30%
Otis Worldwide	10.11%	-29.39%	14.86%

Insider and Institutional Ownership

88.0% of Otis Worldwide shares are held by institutional investors. 0.1% of Otis Worldwide shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Japan Steel Works and Otis Worldwide”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Japan Steel Works	$1.83 billion	2.16	$118.54 million	$0.93	28.82
Otis Worldwide	$14.43 billion	1.94	$1.38 billion	$3.76	19.42

Otis Worldwide has higher revenue and earnings than Japan Steel Works. Otis Worldwide is trading at a lower price-to-earnings ratio than Japan Steel Works, indicating that it is currently the more affordable of the two stocks.

Dividends

Japan Steel Works pays an annual dividend of $0.17 per share and has a dividend yield of 0.6%. Otis Worldwide pays an annual dividend of $1.68 per share and has a dividend yield of 2.3%. Japan Steel Works pays out 18.3% of its earnings in the form of a dividend. Otis Worldwide pays out 44.7% 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. Otis Worldwide has raised its dividend for 5 consecutive years. Otis Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Japan Steel Works and Otis Worldwide, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Japan Steel Works	0	1	1	0	2.50
Otis Worldwide	1	7	3	0	2.18

Otis Worldwide has a consensus price target of $97.64, indicating a potential upside of 33.71%. Given Otis Worldwide’s higher possible upside, analysts plainly believe Otis Worldwide is more favorable than Japan Steel Works.

Volatility & Risk

Japan Steel Works has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500. Comparatively, Otis Worldwide has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.

Summary

Otis Worldwide beats Japan Steel Works on 12 of the 17 factors compared between the two stocks.

About Japan Steel Works

The Japan Steel Works, Ltd. engages in the provision of industrial machinery products, and material and engineering business in Japan and internationally. It operates through Industrial Machinery Products Business, and Material and Engineering Business segments. The Industrial Machinery Products Business segment offers plastic production and processing machinery, such as pelletizers, film and sheet manufacturing equipment, and twin-screw extruders; molding machines including plastic injection molding, magnesium injection molding, and blow molding machines; and other machinery consists of excimer laser annealing systems, defense equipment, railway products, hot press devices, vacuum laminators, and deposit systems, as well as after-sales services for plastics, mobility, high-performance batteries, electronic devices, and defense applications. The Material and Engineering Business segment provides steel casting and forgings, such as reactor and steam generator parts, rotor shafts, turbine casings, die steel, steel rolls for steel manufacturing, and clad steel plates; and engineering and other services, including design and analysis, welded structures, inspection and survey, and hydrogen pressure accumulators and related products for use in power generation equipment, renewable energy, and infrastructure applications. The company offers photonics, composite materials, and metallic materials for use in semiconductors and electronic devices, cameras and sensing devices, aircraft and mobility components, and electronic parts. The Japan Steel Works, Ltd. was founded in 1907 and is headquartered in Shinagawa, Japan.

About Otis Worldwide

Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. This segment serves real-estate and building developers, and general contractors. It sells its products directly to customers, as well as through agents and distributors. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. Otis Worldwide Corporation was founded in 1853 and is headquartered in Farmington, Connecticut.