Otis Worldwide (NYSE:OTIS) and Sumitomo Heavy (OTCMKTS:SOHVY) Critical Survey

Otis Worldwide (NYSE:OTIS) and Sumitomo Heavy (OTCMKTS:SOHVY) are both industrials companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Risk & Volatility

Otis Worldwide has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Sumitomo Heavy has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500.

Dividends

Otis Worldwide pays an annual dividend of $1.68 per share and has a dividend yield of 2.2%. Sumitomo Heavy pays an annual dividend of $0.14 per share and has a dividend yield of 1.7%. Otis Worldwide pays out 44.7% of its earnings in the form of a dividend. Sumitomo Heavy pays out 30.4% 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 increased its dividend for 5 consecutive years. Otis Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Otis Worldwide and Sumitomo Heavy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Otis Worldwide	$14.43 billion	2.05	$1.38 billion	$3.76	20.51
Sumitomo Heavy	$7.14 billion	0.56	$207.28 million	$0.46	18.15

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

Institutional and Insider Ownership

88.0% of Otis Worldwide shares are held by institutional investors. 0.2% of Otis Worldwide shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Otis Worldwide and Sumitomo Heavy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Otis Worldwide	10.11%	-29.39%	14.86%
Sumitomo Heavy	2.98%	4.87%	2.49%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Otis Worldwide and Sumitomo Heavy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Otis Worldwide	1	7	3	0	2.18
Sumitomo Heavy	0	0	0	0	0.00

Otis Worldwide presently has a consensus target price of $97.64, suggesting a potential upside of 26.61%. Given Otis Worldwide’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Otis Worldwide is more favorable than Sumitomo Heavy.

Summary

Otis Worldwide beats Sumitomo Heavy on 15 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 Sumitomo Heavy

Sumitomo Heavy Industries, Ltd. manufactures and sells general machinery, advanced precision machinery, construction machinery, ships, and environmental plant facilities in Japan and internationally. Its Mechatronics segment offers gearmotors, gearboxes, motion control drives, motors and inverters, drive solutions, precision positioning equipment, laser systems, control systems, motion components, and collaborative robot. The company's Industrial Machinery segment provides injection molding machines, cryocoolers, ion implanters, PET tracer production systems, vacuum coasting equipment, steel tube air forming, non-destructive inspections, clean room system, cast iron and steel rolls for hot rolling, and coolant systems. Its Logistics & Construction segment offers hydraulic excavators, crawler cranes, material handing systems, parking systems, transfer molding presses, cryopumps, proton therapy systems, forging presses, lifting magnets, spinning machines, dust collectors, surface grinding machines, extrusion coating line, road machinery, foundation machines, logistics systems, and forklifts. The company's Energy & Lifelines segment provides circulating fluidized bed (CFB) boilers, liquid air energy storage, electrostatic precipitators, evaporation and crystallization facilities, waste heat boilers, CFB scrubbers, flue gas denitrification systems, industrial wastewater treatment facilities, steam turbines, distillation technology and extractors, mixing vessels, and food and beverage manufacturing facilities. This segment also offers bubbling fluidized bed boilers, rotary kiln-type recycling facilities, ash handling systems, fluidized bed gasifiers, waste-to-energy plants baghouses, digital services, water and sewage treatment systems, process pumps, reactor vessels, coke oven machines, and oils tankers. The company provides IT solutions and security services. Sumitomo Heavy Industries, Ltd. was founded in 1888 and is headquartered in Tokyo, Japan.