Contrasting Terex (NYSE:TEX) & Franklin Electric (NASDAQ:FELE)

Franklin Electric (NASDAQ:FELE) and Terex (NYSE:TEX) are both mid-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, institutional ownership, valuation, dividends, earnings and profitability.

Analyst Recommendations

This is a summary of recent ratings and target prices for Franklin Electric and Terex, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Electric	0	2	1	0	2.33
Terex	0	5	5	2	2.75

Franklin Electric presently has a consensus target price of $114.50, suggesting a potential upside of 14.32%. Terex has a consensus target price of $75.64, suggesting a potential upside of 48.64%. Given Terex’s stronger consensus rating and higher possible upside, analysts clearly believe Terex is more favorable than Franklin Electric.

Institutional and Insider Ownership

80.0% of Franklin Electric shares are held by institutional investors. Comparatively, 92.9% of Terex shares are held by institutional investors. 2.9% of Franklin Electric shares are held by company insiders. Comparatively, 1.6% of Terex shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Franklin Electric and Terex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Electric	7.06%	15.18%	10.13%
Terex	2.23%	12.24%	5.16%

Risk & Volatility

Franklin Electric has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, Terex has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500.

Dividends

Franklin Electric pays an annual dividend of $1.12 per share and has a dividend yield of 1.1%. Terex pays an annual dividend of $0.68 per share and has a dividend yield of 1.3%. Franklin Electric pays out 32.3% of its earnings in the form of a dividend. Terex pays out 34.7% 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. Franklin Electric has raised its dividend for 33 consecutive years and Terex has raised its dividend for 5 consecutive years.

Earnings & Valuation

This table compares Franklin Electric and Terex”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Electric	$2.13 billion	2.08	$147.09 million	$3.47	28.86
Terex	$5.42 billion	1.07	$221.00 million	$1.96	25.96

Terex has higher revenue and earnings than Franklin Electric. Terex is trading at a lower price-to-earnings ratio than Franklin Electric, indicating that it is currently the more affordable of the two stocks.

About Franklin Electric

Franklin Electric Co., Inc., together with its subsidiaries, designs, manufactures, and distributes water and fuel pumping systems worldwide. The company operates through Water Systems, Fueling Systems, and Distribution segments. The Water Systems segment offers submersible motors, drives, pumps, electronic controls, water treatment systems, monitoring devices, and related parts and equipment. Its motors and pumps are used principally for pumping clean water and wastewater in various residential, agricultural, municipal, and industrial applications; and manufactures electronic drives and controls that are used in motors for controlling functionality, as well as provides protection from various hazards, such as electrical surges, over-heating, and dry wells or tanks. The Fueling Systems segment provides pumps, pipes, sumps, fittings, vapor recovery components, electronic controls, monitoring devices, and related parts and equipment primarily for use in fueling system applications. This segment serves other energy markets, such as power reliability systems, as well as includes electronic devices for online monitoring of the power utility, hydroelectric, and telecommunication and data center infrastructure. The Distribution segment sells to and provides presale support and specifications to the installing contractors. It sells products produced by the Water Systems segment. The company sells its products to wholesale and retail distributors, specialty distributors, original equipment manufacturers, industrial and petroleum equipment distributors, and oil and utility companies through its employee sales force and independent manufacturing representatives. Franklin Electric Co., Inc. was founded in 1944 and is headquartered in Fort Wayne, Indiana.

About Terex

Terex Corporation manufactures and sells aerial work platforms and materials processing machinery worldwide. It operates in two segments, Materials Processing (MP) and Aerial Work Platforms (AWP). The MP segment designs, manufactures, services, and markets materials processing and specialty equipment, includes crushers, washing systems, screens, trommels, apron feeders, material handlers, pick and carry cranes, rough terrain cranes, tower cranes, wood processing, biomass and recycling equipment, concrete mixer trucks and concrete pavers, conveyors, and related components and replacement parts under the Terex, Powerscreen, Fuchs, EvoQuip, Canica, Cedarapids, CBI, Simplicity, Franna, Terex Ecotec, Finlay, ProAll, ZenRobotics, Terex Washing Systems, Terex MPS, Terex Jaques, Terex Advance, ProStack, Terex Bid-Well, MDS, and Terex Recycling Systems brands. Its products are used in construction, infrastructure, and recycling projects; quarrying and mining, and material handling applications; maintenance applications to lift equipment or material; and landscaping and biomass production industries. The AWP segment designs, manufactures, services, and markets aerial work platform equipment, utility equipment, and telehandlers under the Terex and Genie brands. Its products include portable material lifts, portable aerial work platforms, trailer-mounted articulating booms, self-propelled articulating and telescopic booms, and scissor lifts, as well as related components and replacement parts for construction and maintenance of industrial, commercial, institutional, and residential buildings and facilities, transmission and distribution lines, construction and foundation drilling applications, and other commercial operations, as well as in tree trimming and various infrastructure projects. The company offers financing solutions to assist customers in the rental, leasing, and acquisition of its products. Terex Corporation was founded in 1933 and is based in Norwalk, Connecticut.