Brady (NYSE: BRC) and Ituran Location and Control Ltd. (US) (NASDAQ:ITRN) are both small-cap industrial products companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, dividends, valuation, risk and institutional ownership.

Volatility and Risk

Brady has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, Ituran Location and Control Ltd. (US) has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500.

Insider and Institutional Ownership

77.3% of Brady shares are owned by institutional investors. Comparatively, 53.1% of Ituran Location and Control Ltd. (US) shares are owned by institutional investors. 15.6% of Brady shares are owned 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 Brady and Ituran Location and Control Ltd. (US)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brady 8.81% 13.90% 9.14%
Ituran Location and Control Ltd. (US) 18.99% 36.10% 22.09%

Earnings & Valuation

This table compares Brady and Ituran Location and Control Ltd. (US)’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brady $1.11 billion 1.70 $95.64 million $1.89 19.47
Ituran Location and Control Ltd. (US) $199.57 million 3.51 $32.13 million $2.06 16.24

Brady has higher revenue and earnings than Ituran Location and Control Ltd. (US). Ituran Location and Control Ltd. (US) is trading at a lower price-to-earnings ratio than Brady, indicating that it is currently the more affordable of the two stocks.

Dividends

Brady pays an annual dividend of $0.83 per share and has a dividend yield of 2.3%. Ituran Location and Control Ltd. (US) pays an annual dividend of $0.96 per share and has a dividend yield of 2.9%. Brady pays out 43.9% of its earnings in the form of a dividend. Ituran Location and Control Ltd. (US) pays out 46.6% 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. Ituran Location and Control Ltd. (US) has increased its dividend for 32 consecutive years. Ituran Location and Control Ltd. (US) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Brady and Ituran Location and Control Ltd. (US), as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brady 0 2 2 0 2.50
Ituran Location and Control Ltd. (US) 0 2 0 0 2.00

Brady presently has a consensus target price of $40.50, suggesting a potential upside of 10.05%. Ituran Location and Control Ltd. (US) has a consensus target price of $36.00, suggesting a potential upside of 7.62%. Given Brady’s stronger consensus rating and higher probable upside, research analysts clearly believe Brady is more favorable than Ituran Location and Control Ltd. (US).

Summary

Brady beats Ituran Location and Control Ltd. (US) on 10 of the 17 factors compared between the two stocks.

About Brady

Brady Corporation is a manufacturer and supplier of identification solutions and workplace safety products that identify and protect premises, products and people. The Company has two segments: Identification Solutions (IDS) and Workplace Safety (WPS). The IDS segment includes identification and healthcare products, and the WPS segment includes workplace safety and compliance products. The IDS segment offers products that are manufactured under various brands, including the Brady brand, and are primarily sold through distribution to a range of maintenance, repair and operations (MRO) and original equipment manufacturing (OEM) customers, and through other channels. The WPS segment offers a range of product categories, such as safety and compliance signs, tags, and labels; informational and architectural signage; industrial warehouse and office equipment, and labor law compliance posters. Its brands include Electromark, Identicard, PromoVision, Scafftag, Seton and Emedco.

About Ituran Location and Control Ltd. (US)

Ituran Location and Control Ltd. is a provider of location-based services, consisting of stolen vehicle recovery (SVR), fleet management services and other tracking services. The Company also provides wireless communication products used in connection with its location-based services and various other applications. Its operations consist of two segments: location-based services and wireless communications products. Its location-based services segment consists of its SVR and tracking services, fleet management and value-added services consisted of personal locater services and concierge services. Its wireless communications products segment consists of short and medium range two-way machine-to-machine wireless communications products that are used for various applications, including automatic vehicle location (AVL) and automatic vehicle identification. It primarily provides its services, as well as sells and leases its products in Israel, Brazil, Argentina and the United States.

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