Head-To-Head Review: Otis Worldwide (NYSE:OTIS) vs. Greenbrier Companies (NYSE:GBX)

Otis Worldwide (NYSE:OTIS) and Greenbrier Companies (NYSE:GBX) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Dividends

Otis Worldwide pays an annual dividend of $1.76 per share and has a dividend yield of 2.5%. Greenbrier Companies pays an annual dividend of $1.36 per share and has a dividend yield of 3.1%. Otis Worldwide pays out 45.2% of its earnings in the form of a dividend. Greenbrier Companies pays out 40.4% 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. Otis Worldwide has raised its dividend for 5 consecutive years and Greenbrier Companies has raised its dividend for 3 consecutive years. Greenbrier Companies is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Otis Worldwide and Greenbrier Companies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Otis Worldwide	$14.43 billion	1.88	$1.38 billion	$3.89	18.30
Greenbrier Companies	$3.24 billion	0.41	$204.10 million	$3.37	12.82

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

Volatility and Risk

Otis Worldwide has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Greenbrier Companies has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500.

Institutional & Insider Ownership

88.0% of Otis Worldwide shares are held by institutional investors. Comparatively, 95.6% of Greenbrier Companies shares are held by institutional investors. 0.1% of Otis Worldwide shares are held by insiders. Comparatively, 1.7% of Greenbrier Companies shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for Otis Worldwide and Greenbrier Companies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Otis Worldwide	1	5	4	0	2.30
Greenbrier Companies	1	3	0	0	1.75

Otis Worldwide currently has a consensus target price of $92.91, indicating a potential upside of 30.51%. Greenbrier Companies has a consensus target price of $45.00, indicating a potential upside of 4.19%. Given Otis Worldwide’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Otis Worldwide is more favorable than Greenbrier Companies.

Profitability

This table compares Otis Worldwide and Greenbrier Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Otis Worldwide	10.17%	-28.50%	14.39%
Greenbrier Companies	4.07%	6.49%	2.55%

Summary

Otis Worldwide beats Greenbrier Companies on 11 of the 17 factors compared between the two stocks.

About Otis Worldwide

Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. This segment serves real-estate and building developers, and general contractors. It sells its products directly to customers, as well as through agents and distributors. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. Otis Worldwide Corporation was founded in 1853 and is headquartered in Farmington, Connecticut.

About Greenbrier Companies

The Greenbrier Companies, Inc. designs, manufactures, and markets railroad freight car equipment in North America, Europe, and South America. It operates through three segments: Manufacturing; Maintenance Services; and Leasing & Management Services. The Manufacturing segment offers covered hopper cars, gondolas, open top hoppers, boxcars, center partition cars, tank cars, sustainable conversions, double-stack railcars, auto-max ii, multi-max, and multi-max plus products, intermodal cars, automobile transport, coil steel and metals, flat cars, sliding wall cars, pressurized tank cars, and non-pressurized tank cars. The Maintenance Services segment provides wheel services, including reconditioning of wheels and axles, new axle machining and finishing, and downsizing; operates a railcar repair, refurbishment, and maintenance network; and reconditions and manufactures railcar cushioning units, couplers, yokes, side frames, bolsters, and various other parts. The Leasing & Management Services segment offers operating leases and per diem leases for a fleet of approximately 13,400 railcars; and management services comprising railcar maintenance management, railcar accounting services, fleet management and logistics, administration, and railcar re-marketing. This segment provides management services for railroads, shippers, carriers, institutional investors, and other leasing and transportation companies. It serves railroads, leasing companies, financial institutions, shippers, carriers, and transportation companies. The company was founded in 1974 and is headquartered in Lake Oswego, Oregon.