Comparing Makita (MKTAY) and SPX (SPXC)

Makita (OTCMKTS:MKTAY) and SPX (NYSE:SPXC) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.

Insider & Institutional Ownership

0.5% of Makita shares are owned by institutional investors. Comparatively, 87.0% of SPX shares are owned by institutional investors. 1.0% of Makita shares are owned by company insiders. Comparatively, 1.6% of SPX shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Makita pays an annual dividend of $0.34 per share and has a dividend yield of 0.9%. SPX does not pay a dividend. Makita pays out 18.3% of its earnings in the form of a dividend.

Profitability

This table compares Makita and SPX’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Makita 11.47% 10.14% 8.65%
SPX 7.93% 27.30% 4.25%

Earnings & Valuation

This table compares Makita and SPX’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Makita $4.41 billion 2.32 $492.79 million $1.86 19.63
SPX $1.43 billion 0.86 $89.30 million $1.78 16.00

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Makita and SPX, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Makita 0 1 0 0 2.00
SPX 0 1 2 0 2.67

SPX has a consensus price target of $36.67, indicating a potential upside of 28.75%. Given SPX’s stronger consensus rating and higher possible upside, analysts clearly believe SPX is more favorable than Makita.

Volatility and Risk

Makita has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, SPX has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500.

About Makita

Makita Corporation engages in the manufacture and wholesale of electric power tools, woodworking machines, pneumatic tools, and gardening and household equipment. The company operates through Japan Group, Europe Group, North America Group, Asia Group, and Other Regions Group segments. It offers cordless, drilling/fastening, impact drilling/demolition, grinding/sandling, sawing, planning/routering, pneumatic, outdoor power, and dust extraction/other equipment, as well as accessories; and cutting equipment for new materials, masonry, and metals. The company also provides sanders, hammer drills, rotary hammers, and circular saws. Makita Corporation markets its products under the Makita or Maktec brands in Japan, Europe, North America, Asia, Australia, Brazil, and the United Arab Emirates. The company was formerly known as Makita Electric Works, Ltd. and changed its name to Makita Corporation in April 1991. Makita Corporation was founded in 1915 and is headquartered in Anjo, Japan.

About SPX

SPX Corporation supplies infrastructure equipment serving the heating and ventilation (HVAC), detection and measurement, power transmission and generation, and industrial markets in the United States, China, South Africa, the United Kingdom, and internationally. It operates through three segments: HVAC, Detection and Measurement, and Engineered Solutions. The HVAC segment engineers, designs, manufactures, installs, and services cooling products for the HVAC and industrial markets, as well as boilers, comfort heating, and ventilation products for the residential and commercial markets. The Detection and Measurement segment offers underground pipe and cable locators, and inspection equipment, as well as bus fare collection systems, communication technologies, and specialty lighting products. The Engineered Solutions segment provides transformers for the power transmission and distribution markets; and process cooling equipment, as well as rotating and stationary heat exchangers for the industrial and power generation markets. This segment sells transformers for publicly and privately held utilities under the Waukesha brand name; and process cooling products and heat exchangers under the brand names of the SPX Cooling, Marley, Yuba, and Ecolaire. The company markets its products through various distribution channels, such as direct to customers, independent manufacturing representatives, third-party distributors, and retailers. SPX Corporation is headquartered in Charlotte, North Carolina.

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