ESCO Technologies (NYSE:ESE) and Aebi Schmidt (NASDAQ:AEBI) Critical Review

ESCO Technologies (NYSE:ESE) and Aebi Schmidt (NASDAQ:AEBI) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, institutional ownership, profitability and risk.

Valuation & Earnings

This table compares ESCO Technologies and Aebi Schmidt”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ESCO Technologies	$1.10 billion	6.19	$299.22 million	$12.14	21.55
Aebi Schmidt	$1.53 billion	0.61	$9.74 million	$0.32	37.53

ESCO Technologies has higher earnings, but lower revenue than Aebi Schmidt. ESCO Technologies is trading at a lower price-to-earnings ratio than Aebi Schmidt, indicating that it is currently the more affordable of the two stocks.

Dividends

ESCO Technologies pays an annual dividend of $0.32 per share and has a dividend yield of 0.1%. Aebi Schmidt pays an annual dividend of $0.10 per share and has a dividend yield of 0.8%. ESCO Technologies pays out 2.6% of its earnings in the form of a dividend. Aebi Schmidt pays out 31.2% 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.

Profitability

This table compares ESCO Technologies and Aebi Schmidt’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ESCO Technologies	24.39%	13.28%	8.69%
Aebi Schmidt	1.09%	2.59%	1.04%

Institutional & Insider Ownership

95.7% of ESCO Technologies shares are owned by institutional investors. 0.7% of ESCO Technologies shares are owned by company insiders. Comparatively, 39.1% of Aebi Schmidt shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for ESCO Technologies and Aebi Schmidt, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ESCO Technologies	0	1	3	1	3.00
Aebi Schmidt	0	1	2	0	2.67

ESCO Technologies currently has a consensus price target of $416.50, indicating a potential upside of 59.20%. Aebi Schmidt has a consensus price target of $17.00, indicating a potential upside of 41.55%. Given ESCO Technologies’ stronger consensus rating and higher probable upside, equities research analysts plainly believe ESCO Technologies is more favorable than Aebi Schmidt.

Risk & Volatility

ESCO Technologies has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Aebi Schmidt has a beta of 2.43, suggesting that its stock price is 143% more volatile than the S&P 500.

Summary

ESCO Technologies beats Aebi Schmidt on 12 of the 17 factors compared between the two stocks.

About ESCO Technologies

ESCO Technologies Inc. produces and supplies engineered products and systems for industrial and commercial markets worldwide. It operates through three segments: Aerospace & Defense, Utility Solutions Group, and RF Test & Measurement. The Aerospace & Defense segment designs and manufactures filtration products, including hydraulic filter elements and fluid control devices used in commercial aerospace applications; filter mechanisms used in micro-propulsion devices for satellites; and custom designed filters for manned aircraft and submarines. It also designs, develops, and manufactures elastomeric-based signature reduction solutions for U.S. naval vessels; and mission-critical bushings, pins, sleeves, and precision-tolerance machined components for landing gear, rotor heads, engine mounts, flight controls, and actuation systems for the aerospace and defense industries. The Utility Solutions Group segment provides diagnostic testing solutions that enable electric power grid operators to assess the integrity of high-voltage power delivery equipment; and decision support tools for the renewable energy industry, primarily wind and solar. The RF Test & Measurement segment designs and manufactures RF test and secure communication facilities, acoustic test enclosures, RF and magnetically shielded rooms, RF measurement systems, and broadcast and recording studios; and RF absorptive materials, filters, antennas, field probes, test cells, proprietary measurement software, and other test accessories to perform various tests. The company distributes its products through a network of distributors, sales representatives, direct sales teams, and in-house sales personnel. The company was incorporated in 1990 and is based in Saint Louis, Missouri.

About Aebi Schmidt

Aebi Schmidt Holding AG is a provider of mission-critical infrastructure, environmental and agricultural solutions. Aebi Schmidt Holding AG, formerly known as The Shyft Group Inc., is based in NOVI, Mich.