Reviewing AZZ (NYSE:AZZ) & Enersys (NYSE:ENS)

Enersys (NYSE:ENS) and AZZ (NYSE:AZZ) are both mid-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Insider & Institutional Ownership

94.9% of Enersys shares are held by institutional investors. Comparatively, 90.9% of AZZ shares are held by institutional investors. 0.9% of Enersys shares are held by insiders. Comparatively, 1.8% of AZZ shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Enersys pays an annual dividend of $1.05 per share and has a dividend yield of 0.7%. AZZ pays an annual dividend of $0.80 per share and has a dividend yield of 0.8%. Enersys pays out 12.3% of its earnings in the form of a dividend. AZZ pays out 7.7% 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. Enersys has increased its dividend for 2 consecutive years. AZZ is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Enersys and AZZ”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enersys	$3.73 billion	1.42	$363.73 million	$8.55	16.74
AZZ	$1.59 billion	1.99	$128.83 million	$10.40	10.14

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

Analyst Ratings

This is a summary of recent recommendations for Enersys and AZZ, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enersys	0	0	4	1	3.20
AZZ	0	3	7	1	2.82

Enersys currently has a consensus target price of $126.00, suggesting a potential downside of 11.96%. AZZ has a consensus target price of $115.43, suggesting a potential upside of 9.45%. Given AZZ’s higher probable upside, analysts clearly believe AZZ is more favorable than Enersys.

Profitability

This table compares Enersys and AZZ’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enersys	9.60%	21.99%	10.24%
AZZ	19.69%	15.01%	7.78%

Volatility & Risk

Enersys has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, AZZ has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Summary

AZZ beats Enersys on 9 of the 17 factors compared between the two stocks.

About Enersys

EnerSys engages in the provision of stored energy solutions for industrial applications worldwide. It operates in four segments: Energy Systems, Motive Power, Specialty, and New Ventures. The Energy Systems segment offers uninterruptible power systems (UPS) applications for computer and computer-controlled systems, as well as telecommunications systems; switchgear and electrical control systems used in industrial facilities and electric utilities, large-scale energy storage, and energy pipelines; integrated power solutions and services to broadband, telecom, data center, and renewable and industrial customers; and thermally managed cabinets and enclosures for electronic equipment and batteries. The Motive Power segment provides power solutions for electric industrial forklifts used in manufacturing, warehousing, and other material handling applications, as well as automated guided vehicles, mining equipment, and diesel locomotive starting and other rail equipment. The Specialty offers batteries for starting, lighting, and ignition applications in automotive and over-the-road trucks; and energy solutions for satellites, spacecraft, commercial aircraft, military land vehicles, aircraft, submarines, ships, and other tactical vehicles, as well as medical devices and equipment. The New Venture segment provides energy storage and management systems for demand charge reduction, utility back-up power, and dynamic fast charging for electric vehicles. The company also offers battery chargers, power equipment, battery accessories, and outdoor cabinet enclosures, as well as related after-market and customer-support services for industrial batteries. It sells its products through a network of distributors, independent representatives, and internal sales forces. The company was formerly known as Yuasa, Inc. and changed its name to EnerSys in January 2001. EnerSys was founded in 1991 and is headquartered in Reading, Pennsylvania.

About AZZ

AZZ Inc. provides hot-dip galvanizing and coil coating solutions in North America. It offers metal finishing solutions for corrosion protection, including hot-dip galvanizing, spin galvanizing, powder coating, anodizing, and plating to steel fabrication and other industries, as well as to fabricators or manufacturers that provide services to the transmission and distribution, bridge and highway, petrochemical, and general industrial markets; and original equipment manufacturers. It also provides aesthetic and corrosion protective coatings and related value-added services for steel and aluminum coil primarily serving the construction; appliance; heating, ventilation, and air conditioning; container; transportation; and other end markets. The company was incorporated in 1956 and is headquartered in Fort Worth, Texas.