Head-To-Head Survey: Eaton (NYSE:ETN) and Kone Oyj (OTCMKTS:KNYJY)

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

Valuation and Earnings

This table compares Kone Oyj and Eaton”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kone Oyj	$12.72 billion	2.24	$1.11 billion	$1.07	29.44
Eaton	$27.45 billion	5.05	$4.09 billion	$10.46	34.16

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

Dividends

Kone Oyj pays an annual dividend of $0.45 per share and has a dividend yield of 1.4%. Eaton pays an annual dividend of $4.40 per share and has a dividend yield of 1.2%. Kone Oyj pays out 42.1% of its earnings in the form of a dividend. Eaton pays out 42.1% 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. Kone Oyj is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations for Kone Oyj and Eaton, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kone Oyj	2	3	0	1	2.00
Eaton	0	5	14	2	2.86

Eaton has a consensus price target of $396.75, suggesting a potential upside of 11.02%. Given Eaton’s stronger consensus rating and higher probable upside, analysts clearly believe Eaton is more favorable than Kone Oyj.

Institutional & Insider Ownership

83.0% of Eaton shares are owned by institutional investors. 0.1% of Eaton shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Kone Oyj has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500. Comparatively, Eaton has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Profitability

This table compares Kone Oyj and Eaton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kone Oyj	8.76%	40.59%	11.29%
Eaton	14.89%	25.00%	11.69%

Summary

Eaton beats Kone Oyj on 14 of the 17 factors compared between the two stocks.

About Kone Oyj

KONE Oyj, together with its subsidiaries, engages in the elevator and escalator business worldwide. The company provides elevators, escalators, and automatic building doors. It offers maintenance services; and modernization solutions. In addition, the company offers KONE Office Flow, a connected solution that allows for personalized user experiences and touch-free access; health and well-being solutions for elevators, escalators, and doors; KONE Access, an access control system, which is integrated with elevator system and building doors; KONE Destination, a destination control system that reduce waiting and travel times; KONE infotainment, a communication channel for building tenants and visitors; and monitoring solutions that enable real-time inspection of elevators and escalators. Further, it provides people flow planning and consulting services; solutions for special buildings and large projects; cybersecurity solutions; and energy solutions for greener buildings. KONE Oyj was founded in 1908 and is based in Espoo, Finland.

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.