Parker-Hannifin Corporation (PH) versus Barnes Group (B) Financial Analysis

Parker-Hannifin Corporation (NYSE: PH) and Barnes Group (NYSE:B) are both mid-cap industrial products companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Profitability

This table compares Parker-Hannifin Corporation and Barnes Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Parker-Hannifin Corporation 8.18% 22.90% 8.06%
Barnes Group 11.69% 13.02% 7.20%

Analyst Ratings

This is a summary of recent recommendations and price targets for Parker-Hannifin Corporation and Barnes Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Parker-Hannifin Corporation 0 4 14 0 2.78
Barnes Group 0 2 3 0 2.60

Parker-Hannifin Corporation presently has a consensus price target of $171.53, suggesting a potential upside of 3.90%. Barnes Group has a consensus price target of $63.00, suggesting a potential downside of 2.33%. Given Parker-Hannifin Corporation’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Parker-Hannifin Corporation is more favorable than Barnes Group.

Dividends

Parker-Hannifin Corporation pays an annual dividend of $2.64 per share and has a dividend yield of 1.6%. Barnes Group pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. Parker-Hannifin Corporation pays out 36.5% of its earnings in the form of a dividend. Barnes Group pays out 19.6% 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. Barnes Group has increased its dividend for 4 consecutive years.

Risk and Volatility

Parker-Hannifin Corporation has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, Barnes Group has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Earnings and Valuation

This table compares Parker-Hannifin Corporation and Barnes Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Parker-Hannifin Corporation $12.03 billion 1.83 $1.80 billion $7.23 22.83
Barnes Group $1.34 billion 2.59 $305.46 million $2.86 22.55

Parker-Hannifin Corporation has higher revenue and earnings than Barnes Group. Barnes Group is trading at a lower price-to-earnings ratio than Parker-Hannifin Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

80.2% of Parker-Hannifin Corporation shares are held by institutional investors. Comparatively, 85.3% of Barnes Group shares are held by institutional investors. 2.7% of Parker-Hannifin Corporation shares are held by company insiders. Comparatively, 8.5% of Barnes Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Parker-Hannifin Corporation beats Barnes Group on 10 of the 17 factors compared between the two stocks.

About Parker-Hannifin Corporation

Parker-Hannifin Corporation is a manufacturer of motion and control technologies and systems, providing precision engineered solutions for a range of mobile, industrial and aerospace markets. The Company operates through segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial Segment is an aggregation of several business units, which manufacture motion-control and fluid power system components for builders and users of various types of manufacturing, packaging, processing, transportation, agricultural, construction, and military vehicles and equipment. The Diversified Industrial Segment consists of Automation Group, Engineered Materials Group, Filtration Group, Fluid Connectors Group, Hydraulics Group and Instrumentation Group. The Aerospace Systems Segment produces hydraulic, fuel, pneumatic and electro-mechanical systems and components, which are utilized on domestic commercial, military and general aviation aircrafts.

About Barnes Group

Barnes Group Inc. is an industrial and aerospace manufacturer and service provider, serving a range of end markets and customers. The Company’s engineered products, industrial technologies, and solutions are used in applications that provide transportation, manufacturing, healthcare products and technology to the world. Its segments include Industrial and Aerospace. The Industrial segment is engaged in the manufacturing of precision parts, products and systems for applications serving a customer base in end-markets, such as transportation, industrial equipment, consumer products, packaging, electronics, medical devices and energy. The Industrial segment includes the Molding Solutions, Nitrogen Gas Products and Engineered Components business units. The Aerospace segment includes the original equipment manufacturer (OEM) business and the aftermarket business, which includes maintenance repair and overhaul services and the manufacture and delivery of aerospace aftermarket spare parts.

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