Critical Review: Taylor Devices (NASDAQ:TAYD) versus DXP Enterprises (NASDAQ:DXPE)

Taylor Devices (NASDAQ:TAYD) and DXP Enterprises (NASDAQ:DXPE) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Volatility & Risk

Taylor Devices has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, DXP Enterprises has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Taylor Devices and DXP Enterprises, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Taylor Devices	0	2	0	0	2.00
DXP Enterprises	0	0	2	1	3.33

DXP Enterprises has a consensus price target of $154.00, suggesting a potential downside of 8.82%. Given DXP Enterprises’ stronger consensus rating and higher probable upside, analysts plainly believe DXP Enterprises is more favorable than Taylor Devices.

Valuation and Earnings

This table compares Taylor Devices and DXP Enterprises”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Taylor Devices	$46.29 million	3.70	$9.41 million	$3.30	16.11
DXP Enterprises	$2.02 billion	1.30	$88.68 million	$5.38	31.39

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

Institutional and Insider Ownership

17.6% of Taylor Devices shares are owned by institutional investors. Comparatively, 74.8% of DXP Enterprises shares are owned by institutional investors. 8.9% of Taylor Devices shares are owned by company insiders. Comparatively, 22.7% of DXP Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Taylor Devices and DXP Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Taylor Devices	21.52%	15.77%	14.31%
DXP Enterprises	4.40%	18.83%	6.04%

Summary

DXP Enterprises beats Taylor Devices on 12 of the 15 factors compared between the two stocks.

About Taylor Devices

Taylor Devices, Inc. engages in design, development, manufacture, and marketing of shock absorption, rate control, and energy storage devices for use in machinery, equipment, and structures in the United States, Asia, and internationally. Its products include seismic dampers that are designed to mitigate the effects of earthquakes on structures; Fluidicshoks, which are compact shock absorbers primarily used in defense, aerospace, and commercial industries; and crane and industrial buffers, which are larger versions of the Fluidicshoks for industrial application on cranes and crane trolleys, truck docks, ladle and ingot cars, ore trolleys, and train car stops. The company's products also comprise self-adjusting shock absorbers that include versions of Fluidicshoks, and crane and industrial buffers, which automatically adjust to various impact conditions and are designed for high cycle application primarily in the heavy industry; liquid die springs that are used as component parts of machinery and equipment used in the manufacture of tools and dies; vibration dampers, which are primarily used by aerospace and defense industries to control the response of electronics and optical systems subjected to air, ship, or spacecraft vibration; machined springs used in the aerospace applications; and custom actuators for special aerospace and defense applications. It markets its products through a network of sales representatives and distributors. The company was incorporated in 1955 and is headquartered in North Tonawanda, New York.

About DXP Enterprises

DXP Enterprises, Inc., together with its subsidiaries, engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services in the United States and Canada. It operates through three segments: Service Centers (SC), Supply Chain Services (SCS), and Innovative Pumping Solutions (IPS). The SC segment offers MRO products, equipment, and integrated services, including technical expertise and logistics services. It offers a range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products, and safety services categories. This segment serves customers in the oil and gas, food and beverage, petrochemical, transportation, other general industrial, mining, construction, chemical, municipal, agriculture, and pulp and paper industries. The SCS segment manages procurement and inventory vinventory optimization and management, storeroom management, transaction consolidation and control, vendor oversight and procurement cost optimization, productivity improvement, and customized reporting services. Its programs include SmartAgreement, a procurement solution for various MRO categories; SmartBuy, an on-site or centralized MRO procurement solution; SmartSource, an on-site procurement and storeroom management solution; SmartStore, an e-Catalog solution; SmartVend, an industrial dispensing solution; and SmartServ, an integrated service pump solution. The IPS segment fabricates and assembles custom-made pump packages; remanufactures pumps; and manufactures branded private label pumps. DXP Enterprises, Inc. was founded in 1908 and is based in Houston, Texas.