Hyster-Yale (NYSE:HY) versus ESAB (NYSE:ESAB) Critical Review

ESAB (NYSE:ESAB) and Hyster-Yale (NYSE:HY) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.

Valuation and Earnings

This table compares ESAB and Hyster-Yale”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ESAB	$2.84 billion	1.45	$226.77 million	$2.79	23.80
Hyster-Yale	$3.77 billion	0.14	-$60.10 million	($6.56)	-4.53

ESAB has higher earnings, but lower revenue than Hyster-Yale. Hyster-Yale is trading at a lower price-to-earnings ratio than ESAB, indicating that it is currently the more affordable of the two stocks.

Dividends

ESAB pays an annual dividend of $0.48 per share and has a dividend yield of 0.7%. Hyster-Yale pays an annual dividend of $1.46 per share and has a dividend yield of 4.9%. ESAB pays out 17.2% of its earnings in the form of a dividend. Hyster-Yale pays out -22.3% 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. ESAB has increased its dividend for 3 consecutive years and Hyster-Yale has increased its dividend for 1 consecutive years. Hyster-Yale is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

91.1% of ESAB shares are held by institutional investors. Comparatively, 46.5% of Hyster-Yale shares are held by institutional investors. 7.2% of ESAB shares are held by company insiders. Comparatively, 37.8% of Hyster-Yale shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

ESAB has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, Hyster-Yale has a beta of 1.63, suggesting that its share price is 63% more volatile than the S&P 500.

Profitability

This table compares ESAB and Hyster-Yale’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ESAB	5.75%	14.48%	5.99%
Hyster-Yale	-3.33%	-21.03%	-4.87%

Analyst Ratings

This is a summary of recent ratings and price targets for ESAB and Hyster-Yale, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ESAB	0	1	6	0	2.86
Hyster-Yale	1	1	2	0	2.25

ESAB presently has a consensus target price of $118.67, suggesting a potential upside of 78.74%. Hyster-Yale has a consensus target price of $47.50, suggesting a potential upside of 59.90%. Given ESAB’s stronger consensus rating and higher possible upside, research analysts plainly believe ESAB is more favorable than Hyster-Yale.

Summary

ESAB beats Hyster-Yale on 11 of the 16 factors compared between the two stocks.

About ESAB

ESAB Corporation engages in the formulation, development, manufacture, and supply of consumable products and equipment for use in cutting, joining, automated welding, and gas control equipment. Its comprehensive range of welding consumables includes electrodes, cored and solid wires, and fluxes using a range of specialty and other materials; and cutting consumables comprising electrodes, nozzles, shields, and tips. The company's equipment ranges from portable welding machines to large customized automated cutting and welding systems. It also offers a range of software and digital solutions to help its customers increase their productivity, remotely monitor their welding operations, and digitize their documentation. The company sells its products under the ESAB brand to various end markets, such as general industry, infrastructure, renewable energy, medical and life sciences, transportation, construction, and energy. It offers its products through independent distributors and direct salespeople. The company operates in North America, South America, Europe, the Middle East, India, Africa, and the Asia Pacific. ESAB Corporation was founded in 1904 and is headquartered in North Bethesda, Maryland.

About Hyster-Yale

Hyster-Yale, Inc., through its subsidiaries, designs, engineers, manufactures, sells, and services a line of lift trucks, attachments, and aftermarket parts worldwide. The company manufactures components, such as frames, masts, and transmissions; and assembles lift trucks. It markets its products primarily under the Hyster and Yale brand names to independent Hyster and Yale retail dealerships. The company also sells aftermarket parts under the Hyster and Yale, as well as UNISOURCE and PREMIER brands to Hyster and Yale dealers for the service of competitor lift trucks. In addition, it produces and distributes attachments, forks, and lift tables under the Bolzoni, Auramo, and Meyer brand names; and designs and produces products in the port equipment and rough terrain forklift markets. Further, the company designs, manufactures, and sells hydrogen fuel-cell stacks and engines. It serves light and heavy manufacturers, trucking and automotive companies, rental companies, building materials and paper suppliers, lumber, metal products, warehouses, retailers, food distributors, container handling companies, and U.S. and non-U.S. governmental agencies. The company was formerly known as Hyster-Yale Materials Handling, Inc. and changed its name to Hyster-Yale, Inc. in June 2024. Hyster-Yale, Inc. was incorporated in 1991 and is headquartered in Cleveland, Ohio.