Critical Analysis: Kone Oyj (OTCMKTS:KNYJY) versus Omega Flex (NASDAQ:OFLX)

Omega Flex (NASDAQ:OFLX) and Kone Oyj (OTCMKTS:KNYJY) are both industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Dividends

Omega Flex pays an annual dividend of $1.36 per share and has a dividend yield of 5.3%. Kone Oyj pays an annual dividend of $0.45 per share and has a dividend yield of 1.6%. Omega Flex pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kone Oyj pays out 42.5% of its earnings in the form of a dividend. Omega Flex has raised its dividend for 7 consecutive years. Omega Flex is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Omega Flex and Kone Oyj, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Omega Flex	1	0	0	0	1.00
Kone Oyj	3	3	1	1	2.00

Profitability

This table compares Omega Flex and Kone Oyj’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Omega Flex	12.27%	14.26%	11.54%
Kone Oyj	8.33%	38.87%	10.68%

Earnings and Valuation

This table compares Omega Flex and Kone Oyj”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Omega Flex	$98.30 million	2.62	$14.83 million	$1.19	21.44
Kone Oyj	$12.72 billion	2.05	$1.11 billion	$1.06	27.19

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

Risk & Volatility

Omega Flex has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, Kone Oyj has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Insider & Institutional Ownership

36.1% of Omega Flex shares are held by institutional investors. 65.2% of Omega Flex shares are held by company 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.

Summary

Kone Oyj beats Omega Flex on 9 of the 17 factors compared between the two stocks.

About Omega Flex

Omega Flex, Inc., together with its subsidiaries, manufactures and sells flexible metal hoses and accessories in North America and internationally. It offers flexible gas piping for use in residential and commercial buildings; fittings; containment pining; and corrugated medical tubing for use in hospitals, ambulatory care centers, dental, physician and veterinary clinics, laboratories, and other facilities. The company sells its products under the TracPipe, CounterStrike, AutoSnap, AutoFlare, DoubleTrac, DEF-Trac, and MediTrac brand names. It serves various markets, including construction, manufacturing, transportation, petrochemical, pharmaceutical, and other industries. The company sells its products through independent sales representatives, distributors, fabricating distributors, wholesalers, original equipment manufacturers, and direct sales, as well as through its website. The company was formerly known as Tofle America, Inc. and changed its name to Omega Flex, Inc. in 1996. Omega Flex, Inc. was incorporated in 1975 and is based in Exton, Pennsylvania.

About Kone Oyj

KONE Oyj, together with its subsidiaries, engages in the elevator and escalator business worldwide. The company provides elevators, escalators, and automatic building doors. It offers maintenance services; and modernization solutions. In addition, the company offers KONE Office Flow, a connected solution that allows for personalized user experiences and touch-free access; health and well-being solutions for elevators, escalators, and doors; KONE Access, an access control system, which is integrated with elevator system and building doors; KONE Destination, a destination control system that reduce waiting and travel times; KONE infotainment, a communication channel for building tenants and visitors; and monitoring solutions that enable real-time inspection of elevators and escalators. Further, it provides people flow planning and consulting services; solutions for special buildings and large projects; cybersecurity solutions; and energy solutions for greener buildings. KONE Oyj was founded in 1908 and is based in Espoo, Finland.