Eastern (NASDAQ:EML) and L S Starrett (NYSE:SCX) are both small-cap industrial products companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, risk, valuation and profitability.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Eastern and L S Starrett, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eastern 0 0 0 0 N/A
L S Starrett 0 0 0 0 N/A

Institutional and Insider Ownership

64.9% of Eastern shares are held by institutional investors. Comparatively, 41.7% of L S Starrett shares are held by institutional investors. 13.7% of Eastern shares are held by company insiders. Comparatively, 2.1% of L S Starrett shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Eastern has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500. Comparatively, L S Starrett has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Profitability

This table compares Eastern and L S Starrett’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eastern 4.30% 13.72% 7.01%
L S Starrett -2.12% -9.15% -4.28%

Dividends

Eastern pays an annual dividend of $0.44 per share and has a dividend yield of 1.6%. L S Starrett pays an annual dividend of $0.10 per share and has a dividend yield of 1.8%.

Valuation and Earnings

This table compares Eastern and L S Starrett’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eastern $204.24 million 0.87 $5.04 million N/A N/A
L S Starrett $216.33 million 0.18 -$3.63 million N/A N/A

Eastern has higher earnings, but lower revenue than L S Starrett.

Summary

Eastern beats L S Starrett on 7 of the 10 factors compared between the two stocks.

Eastern Company Profile

The Eastern Company designs, manufactures, and sells industrial hardware, security products, and metal products in the United States and internationally. The company's Industrial Hardware segment offers passenger restraint and vehicular locks, latches, hinges, mirrors, mirror-cameras, light-weight sleeper boxes, and truck bodies for tractor-trailer trucks, specialty commercial vehicles, recreational vehicles, fire and rescue vehicles, school buses, military vehicles, and other vehicles. This segment also provides fasteners and other closure devices. The company's Security Products segment offers e engineered and standard closing and locking systems, including vehicular accessory locks, cabinet locks, cam locks, electric switch locks, tubular key locks, and combination padlocks under the SESAMEE, PRESTOLOCK and SEARCHALERT names. Its products also include timers, drop meters, coin chutes, money boxes, meter cases, smart cards, value transfer stations, smart card readers, card management software, and access control units. In addition, this segment provides coin acceptors and other coin security products for the commercial laundry markets; and circuit boards and other electronic assemblies to various industries, including measurement systems, semiconductor equipment manufacturing, and industrial controls, medical, and military products. The company's Metal Products segment offers expansion shells to support the roofs of underground mines; and specialty malleable and ductile iron castings. This segment's products include mine roof support anchors, couplers for railroad braking systems, support anchoring for construction, and couplers/fittings for utility industries. The company sells its products to original equipment manufacturers, distributors, route operators, and locksmiths. The Eastern Company was founded in 1858 and is based in Naugatuck, Connecticut.

L S Starrett Company Profile

The L.S. Starrett Company, together with its subsidiaries, manufactures and sells industrial, professional, and consumer measuring and cutting tools, and related products primarily in North America, Brazil, China, the United Kingdom, Australia, and New Zealand. The company's products include precision tools, electronic gages, gage blocks, optical vision and laser measuring equipment, custom engineered granite solutions, squares, band saw blades, hole saws, hacksaw blades, jig saw blades, and reciprocating saw blades, as well as M1 lubricant and precision ground flat stock products. It also provides measuring tools, such as micrometers, vernier calipers, height gages, depth gages, dial indicators, steel rules, and combination squares, as well as custom, non-contact, and in-process gaging products; and force measurement and material test equipment. In addition, the company offers material test systems comprising hardware and software; manual and automated field of view measurement systems; and hand tools for measuring, marking, and layout that include tapes, levels, chalk lines, and other products for building trades, and construction and retail trades. Further, it provides carbide tipped products for cutting ferrous materials, and non-ferrous metals and castings. The company primarily distributes its precision hand tools, and saw and construction products through distributors or resellers. It serves the metalworking, aerospace, and automotive markets; marine and farm equipment shops, and do-it-yourselfers; and tradesmen, which comprise builders, carpenters, plumbers, and electricians. The L.S. Starrett Company was founded in 1880 and is headquartered in Athol, Massachusetts.

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