Eastern (NASDAQ:EML – Get Free Report) and Trinity Industries (NYSE:TRN – Get Free Report) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitability, analyst recommendations and earnings.
Risk and Volatility
Eastern has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Trinity Industries has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500.
Profitability
This table compares Eastern and Trinity Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Eastern | 3.44% | 3.38% | 1.89% |
| Trinity Industries | 16.62% | 18.51% | 2.56% |
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Eastern | $248.97 million | 0.61 | $7.13 million | $1.34 | 18.79 |
| Trinity Industries | $2.04 billion | 0.99 | $253.10 million | $4.15 | 6.12 |
Trinity Industries has higher revenue and earnings than Eastern. Trinity Industries is trading at a lower price-to-earnings ratio than Eastern, indicating that it is currently the more affordable of the two stocks.
Dividends
Eastern pays an annual dividend of $0.44 per share and has a dividend yield of 1.7%. Trinity Industries pays an annual dividend of $1.24 per share and has a dividend yield of 4.9%. Eastern pays out 32.8% of its earnings in the form of a dividend. Trinity Industries pays out 29.9% 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. Trinity Industries has raised its dividend for 16 consecutive years. Trinity Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
77.0% of Eastern shares are held by institutional investors. Comparatively, 86.6% of Trinity Industries shares are held by institutional investors. 18.4% of Eastern shares are held by insiders. Comparatively, 2.1% of Trinity Industries shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Analyst Ratings
This is a summary of recent ratings and target prices for Eastern and Trinity Industries, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Eastern | 0 | 2 | 0 | 0 | 2.00 |
| Trinity Industries | 0 | 3 | 0 | 0 | 2.00 |
Trinity Industries has a consensus price target of $35.00, suggesting a potential upside of 37.80%. Given Trinity Industries’ higher possible upside, analysts plainly believe Trinity Industries is more favorable than Eastern.
Summary
Trinity Industries beats Eastern on 13 of the 15 factors compared between the two stocks.
About Eastern
The Eastern Company designs, manufactures, and sells engineered solutions to industrial markets in the United States and internationally. The company offers turnkey returnable packaging solutions, which are used in the assembly processes of vehicles, aircraft, and durable goods, as well as in production processes of plastic packaging products, packaged consumer goods, and pharmaceuticals; designs and manufactures blow mold tools and injection blow mold tooling products, and 2-step stretch blow molds and related components for the stretch blow molding industry; and supplies blow molds and change parts to the food, beverage, healthcare, and chemical industries. It also provides rotary latches, compression latches, draw latches, hinges, camlocks, key switches, padlocks, and handles; and development and program management services for custom electromechanical and mechanical systems for original equipment manufacturers (OEMs) and customer applications. In addition, the company designs and manufactures proprietary vision technology for OEMs and aftermarket applications, as well as offers aftermarket components to the heavy- and medium-duty truck, motorhome, and bus markets. The Eastern Company was founded in 1858 and is based in Shelton, Connecticut.
About Trinity Industries
Trinity Industries, Inc. provides rail transportation products and services under the TrinityRail name in North America. It operates in two segments, Railcar Leasing and Management Services Group, and Rail Products Group. The Railcar Leasing and Management Services Group segment leases freight and tank railcars; originates and manages railcar leases for third-party investors; and provides fleet maintenance and management services. As of December 31, 2023, it had a fleet of 109,295 railcars. This segment serves industrial shipper and railroad companies operating in agriculture, construction and metals, consumer products, energy, and refined products and chemicals markets. The Rail Products Group segment manufactures freight and tank railcars for transporting various liquids, gases, and dry cargo; and offers railcar maintenance and modification services. This segment serves railroads, leasing companies, and industrial shippers of products in the agriculture, construction and metals, consumer products, energy, and refined products and chemicals markets. It sells or leases products and services through its own sales personnel and independent sales representatives. The company was incorporated in 1933 and is headquartered in Dallas, Texas.
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