Itron (NASDAQ: ITRI) and MTS Systems (NASDAQ:MTSC) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Profitability

This table compares Itron and MTS Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Itron 5.52% 13.73% 5.99%
MTS Systems 3.18% 10.32% 3.61%

Dividends

MTS Systems pays an annual dividend of $1.20 per share and has a dividend yield of 2.2%. Itron does not pay a dividend. MTS Systems pays out 91.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

Itron has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, MTS Systems has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Earnings & Valuation

This table compares Itron and MTS Systems’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Itron $2.01 billion 1.30 $31.77 million $1.71 39.56
MTS Systems $787.96 million 1.22 $25.08 million $1.31 41.41

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

Insider and Institutional Ownership

93.5% of Itron shares are owned by institutional investors. Comparatively, 97.9% of MTS Systems shares are owned by institutional investors. 2.0% of Itron shares are owned by company insiders. Comparatively, 1.8% of MTS Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Itron and MTS Systems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Itron 0 4 4 0 2.50
MTS Systems 0 1 2 0 2.67

Itron presently has a consensus target price of $81.75, suggesting a potential upside of 20.84%. MTS Systems has a consensus target price of $65.50, suggesting a potential upside of 20.74%. Given Itron’s higher possible upside, equities research analysts clearly believe Itron is more favorable than MTS Systems.

Summary

Itron beats MTS Systems on 11 of the 16 factors compared between the two stocks.

About Itron

Itron, Inc. (Itron) is a technology and service company. The Company provides solutions that measure, manage and analyze energy and water use. The Company operates through three segments: Electricity, Gas and Water. It provides a portfolio of products, solutions, software and services to electric, gas and water utility customers across the globe. It offers solutions that enable electric and natural gas utilities to build smart grids to manage assets. It offers a product portfolio, including standard meters and smart metering products, systems and services, for applications in the residential and commercial industrial markets for water and heat. The Company operates under the Itron brand across the world. Its Gas and Water manufacturing facilities are located throughout the world, while its Electricity manufacturing facilities are located in Europe, Middle East and Africa (EMEA), and North America.

About MTS Systems

MTS Systems Corporation is a supplier of test systems and position sensors. The Company operates through two segments: Test and Sensors. The Test segment provides testing solutions, including hardware, software and services to ground vehicles, materials and structures markets. The Sensors segment provides position sensors for a range of industrial and mobile hydraulic applications. The Sensors segment products are used by industrial machinery and mobile equipment manufacturers to automate the operation of their products for safety and end-user productivity. The Sensors segment manufactures products utilizing magnetostriction technology. Its technology, Temposonics, offers non-contact position sensing. Its Temposonics sensors provide position feedback for motion control systems. It also provides various service offerings, including calibration, maintenance, training and consulting. The Company has its manufacturing facilities in North America, Europe and Asia.

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