Comparing nVent Electric (NYSE:NVT) and Eaton (NYSE:ETN)

Eaton (NYSE:ETN) and nVent Electric (NYSE:NVT) are both large-cap industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, valuation, profitability, analyst recommendations, earnings and dividends.

Dividends

Eaton pays an annual dividend of $4.40 per share and has a dividend yield of 1.3%. nVent Electric pays an annual dividend of $0.84 per share and has a dividend yield of 0.9%. Eaton pays out 44.0% of its earnings in the form of a dividend. nVent Electric pays out 20.2% 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. nVent Electric has raised its dividend for 2 consecutive years.

Insider & Institutional Ownership

83.0% of Eaton shares are held by institutional investors. Comparatively, 90.0% of nVent Electric shares are held by institutional investors. 0.1% of Eaton shares are held by insiders. Comparatively, 1.7% of nVent Electric shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Eaton has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500. Comparatively, nVent Electric has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500.

Earnings & Valuation

This table compares Eaton and nVent Electric”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eaton	$31.98 billion	3.96	$4.09 billion	$10.01	32.56
nVent Electric	$3.89 billion	4.08	$710.20 million	$4.15	23.67

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

Profitability

This table compares Eaton and nVent Electric’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eaton	12.18%	25.09%	9.62%
nVent Electric	12.84%	20.82%	11.20%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Eaton and nVent Electric, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eaton	0	2	20	1	2.96
nVent Electric	0	1	16	3	3.10

Eaton currently has a consensus target price of $483.91, indicating a potential upside of 48.45%. nVent Electric has a consensus target price of $197.82, indicating a potential upside of 101.42%. Given nVent Electric’s stronger consensus rating and higher probable upside, analysts clearly believe nVent Electric is more favorable than Eaton.

Summary

nVent Electric beats Eaton on 11 of the 18 factors compared between the two stocks.

About Eaton

Eaton Corporation plc operates as a power management company worldwide. The company’s Electrical Americas and Electrical Global segment provides electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality and connectivity products, wiring devices, circuit protection products, utility power distribution products, power reliability equipment, and services, as well as hazardous duty electrical equipment, emergency lighting, fire detection, explosion-proof instrumentation, and structural support systems. Its Aerospace segment offers pumps, motors, hydraulic power units, hoses and fittings, and electro-hydraulic pumps; valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems, and nose wheel steering systems; hose, thermoplastic tubing products, fittings, adapters, couplings, and sealing and ducting products; air-to-air refueling systems, fuel pumps, fuel inerting products, sensors, and adapters and regulators; oxygen generation system, payload carriages, and thermal management products; and wiring connectors and cables, as well as hydraulic and bag filters, strainers and cartridges, and golf grips for manufacturers of commercial and military aircraft, and related after-market customers, as well as industrial applications. The company’s Vehicle segment offers transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, locking and limited slip differentials, transmission controls, and fuel vapor components for the vehicle industry. Its eMobility segment provides voltage inverters, converters, fuses, circuit protection units, vehicle controls, power distribution systems, fuel tank isolation valves, and commercial vehicle hybrid systems. Eaton Corporation plc was founded in 1911 and is based in Dublin, Ireland.

About nVent Electric

nVent Electric plc, together with its subsidiaries, designs, manufactures, markets, installs, and services electrical connection and protection solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company operates through three segments: Enclosures, Electrical & Fastening Solutions, and Thermal Management. The Enclosures segment provides solutions to protect electronics and data in mission critical applications, including data solutions. This segment also offers digital and automation solutions, system integrations, and global services. The Electrical & Fastening Solutions segment provides solutions that connect and protect power and data infrastructure. This segment also offers power connections, fastening solutions, cable management solutions, grounding and bonding systems, and tools and test instruments. The Thermal Management segment offers heat management solutions that protect people and assets. This segment includes heat tracing for freeze protection and process temperature maintenance and control; pipe freeze protection, surface deicing, hot water temperature maintenance, floor heating, fire-rated wiring, and leak detection; and heat trace systems, connected controls, remote monitoring, and annual service programs. The company markets its products through electrical distributors, contractors, and original equipment manufacturers under the CADDY, ERICO, GARDNER BENDER, HOFFMAN, ILSCO, RAYCHEM, SCHROFF, and TRACER brand names. Its products are used for various applications, such as industrial, commercial and residential, infrastructure, and energy. nVent Electric plc was founded in 1903 and is based in London, the United Kingdom.