L.B. Foster (NASDAQ:FSTR) and Fortive (NYSE:FTV) Financial Review

Fortive (NYSE:FTV) and L.B. Foster (NASDAQ:FSTR) are both industrials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.

Earnings and Valuation

This table compares Fortive and L.B. Foster”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fortive	$4.16 billion	4.01	$579.20 million	$1.69	32.67
L.B. Foster	$558.35 million	0.70	$7.55 million	$1.05	35.21

Fortive has higher revenue and earnings than L.B. Foster. Fortive is trading at a lower price-to-earnings ratio than L.B. Foster, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Fortive and L.B. Foster’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fortive	12.38%	15.33%	8.23%
L.B. Foster	2.04%	7.61%	4.03%

Dividends

Fortive pays an annual dividend of $0.28 per share and has a dividend yield of 0.5%. L.B. Foster pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. Fortive pays out 16.6% of its earnings in the form of a dividend. L.B. Foster pays out 15.2% 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. Fortive has increased its dividend for 2 consecutive years. Fortive is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Fortive and L.B. Foster, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fortive	2	8	2	0	2.00
L.B. Foster	0	3	1	0	2.25

Fortive presently has a consensus target price of $63.10, suggesting a potential upside of 14.30%. L.B. Foster has a consensus target price of $32.00, suggesting a potential downside of 13.44%. Given Fortive’s higher probable upside, analysts clearly believe Fortive is more favorable than L.B. Foster.

Insider & Institutional Ownership

94.9% of Fortive shares are held by institutional investors. Comparatively, 80.6% of L.B. Foster shares are held by institutional investors. 0.7% of Fortive shares are held by insiders. Comparatively, 7.6% of L.B. Foster shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Fortive has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, L.B. Foster has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Summary

Fortive beats L.B. Foster on 12 of the 17 factors compared between the two stocks.

About Fortive

Fortive Corporation designs, develops, manufactures, and services professional and engineered products, software, and services in the United States, China, and internationally. It operates in three segments: Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions. The Intelligent Operating Solutions segment provides advanced instrumentation, software, and services, including electrical test and measurement, facility and asset lifecycle software applications, and connected worker safety and compliance solutions for manufacturing, process industries, healthcare, utilities and power, communications and electronics, and other industries. This segment markets its products and services under the ACCRUENT, FLUKE, GORDIAN, INDUSTRIAL SCIENTIFIC, INTELEX, PRUFTECHNIK, and SERVICECHANNEL brands. The Precision Technologies segment offers electrical test and measurement, sensing and material technologies for industrial, power and energy, automotive, medical equipment, food and beverage, aerospace and defense, semiconductor, and other general industries under the ANDERSON-NEGELE, GEMS, SETRA, HENGSTLER-DYNAPAR, QUALITROL, PACIFIC SCIENTIFIC, KEITHLEY, and TEKTRONIX brand names. The Advanced Healthcare Solutions segment provides critical workflow solutions comprising instrument sterilization, instrument tracking, design and manufacture of cell therapy equipment, biomedical test tools, radiation detection and safety monitoring, and end-to-end clinical productivity software and solutions under the ASP, CENSIS, CENSITRAC, EVOTECH, FLUKE BIOMEDICAL, INVETECH, LANDAUER, PROVATION, RAYSAFE, and STERRAD brands. Fortive Corporation was incorporated in 2015 and is headquartered in Everett, Washington.

About L.B. Foster

L.B. Foster Company provides engineered and manufactured products and services for the building and infrastructure projects in the United States, Canada, the United Kingdom, and internationally. It operates through two segments: Rail, Technologies, and Services; and Infrastructure Solutions. The Rail, Technologies, and Services segment offers new rail to passenger and short line freight railroads, industrial companies, and rail contractors, as well as used rails; rail accessories, such as rack spikes, bolts, angle bars, tie plates, and other products; insulated rail joints and related accessories; fixation fasteners, coverboards, and special accessories; and trackwork products. This segment also provides engineered concrete railroad ties, friction management products and application systems, railroad condition monitoring systems and equipment including wheel impact load detection systems, wayside data collection and management systems, and rockfall, flood, earthworks, and bridge strike monitoring; and aftermarket services. The Infrastructure Solutions segment manufactures precast concrete products for use as restrooms, concession stands, and protective storage buildings under the CXT brand for national, state, and municipal parks; and manufactures sounds walls, bridge beams, box culverts, septic tanks, and other custom pre-stressed and precast concrete products. This segment also provides steel bridge products; corrosion protection solutions; concrete-reinforced steel grid decking, open steel grid deck, aluminum bridge railing, and stay-in-place steel bridge forms; cuts, threads, and paints pipe; threading services for water well applications; protective pipeline coating services; and turnkey solutions for metering and injection systems for oil and gas markets. L.B. Foster Company was founded in 1902 and is headquartered in Pittsburgh, Pennsylvania.