Comparing Pentair (NYSE:PNR) and Metso (MXCYY)

Metso (OTCMKTS: MXCYY) and Pentair (NYSE:PNR) are both industrial products companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Insider and Institutional Ownership

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0.0% of Metso shares are held by institutional investors. Comparatively, 86.5% of Pentair shares are held by institutional investors. 1.0% of Metso shares are held by company insiders. Comparatively, 10.7% of Pentair 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.

Analyst Recommendations

This is a summary of current ratings and price targets for Metso and Pentair, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Metso 1 0 0 0 1.00
Pentair 4 9 3 0 1.94

Pentair has a consensus price target of $71.33, indicating a potential upside of 0.03%. Given Pentair’s stronger consensus rating and higher possible upside, analysts clearly believe Pentair is more favorable than Metso.

Earnings and Valuation

This table compares Metso and Pentair’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Metso $3.06 billion 1.59 $115.29 million $0.24 33.75
Pentair $4.94 billion 2.63 $666.50 million $3.53 20.20

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

Profitability

This table compares Metso and Pentair’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Metso 3.71% 9.88% 4.10%
Pentair 13.50% 13.41% 6.86%

Volatility & Risk

Metso has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500. Comparatively, Pentair has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Dividends

Metso pays an annual dividend of $0.25 per share and has a dividend yield of 3.1%. Pentair pays an annual dividend of $1.40 per share and has a dividend yield of 2.0%. Metso pays out 104.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pentair pays out 39.7% of its earnings in the form of a dividend. Pentair has increased its dividend for 41 consecutive years.

Summary

Pentair beats Metso on 14 of the 17 factors compared between the two stocks.

About Metso

Metso Corporation, an industrial company, provides equipment and services for mining, aggregates, recycling, oil, gas, pulp, paper, and process industries worldwide. The company operates through Minerals and Flow Control segments. It offers mining solutions, including crushing, screening, grinding, classification, beneficiation, dewatering, pyro processing, bulk materials handling, and slurry pumping solutions, as well as wear and spare parts; and aggregates, such as crushers, screens, feeders, lokotrack mobile plants, NW portable and rapid plants, rock breakers, air classifiers, slurry pumps, and preowned equipment, as well as wear and spare parts. The company also provides control, on-off, emergency shutdown, butterfly, ball, segment, eccentric plug, globe, special, and tank car valves; valve controls and limit switches; electric, pneumatic, and manual actuators; positioners, on-off controllers; intelligent safety solenoids; instrumentation panel; and valve spare parts. In addition, it offers metal recycling solutions, including balers, post shredder technology, turnings and pre shredders, anode crusher, shredders, briquettes, and shears; and waste recycling solutions, such as mobile pre-shredders, pre-shredders, and fine-shredders. Further, the company provides expert, flow control, field, performance, and training services. Metso Corporation is headquartered in Helsinki, Finland.

About Pentair

Pentair plc operates as a diversified industrial manufacturing company in the United States, Europe, and internationally. The company operates through two segments, Water and Electrical. The Water segment designs, manufactures, and services products and solutions to meet filtration, separation, flow, and water management challenges in agriculture, aquaculture, foodservice, food and beverage processing, swimming pools, water supply and disposal, and various industrial applications. This segment serves wholesalers and retail distributors, end-users, engineering procurement contractors, and original equipment manufacturers under the Aurora, Berkeley, Codeline, Everpure, Fairbanks-Nijhuis, Kreepy Krauly, Haffmans, Hydromatic, Hypro, Pentair, Pentair Aquatic Eco-Systems, Sta-Rite, Shurflo, Südmo, and X-Flow brand names. The Electrical segment designs, manufactures, and services products that protect sensitive equipment and buildings; thermal management systems; and engineered fastening solutions. This segment serves commercial, communications, energy, electronics, infrastructure, medical, security, and defense industries under the CADDY, ERICO, Hoffman, LENTON, Raychem, Schroff, and Tracer brands. Pentair plc was founded in 1966 and is based in London, the United Kingdom.

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