Financial Contrast: Amada (OTCMKTS:AMDLY) & Stanley Black & Decker (NYSE:SWK)

Amada (OTCMKTS:AMDLY) and Stanley Black & Decker (NYSE:SWK) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitability.

Volatility and Risk

Amada has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500. Comparatively, Stanley Black & Decker has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Amada and Stanley Black & Decker, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amada	0	0	0	0	0.00
Stanley Black & Decker	1	5	5	0	2.36

Stanley Black & Decker has a consensus price target of $93.40, suggesting a potential upside of 36.15%. Given Stanley Black & Decker’s stronger consensus rating and higher probable upside, analysts plainly believe Stanley Black & Decker is more favorable than Amada.

Dividends

Amada pays an annual dividend of $1.22 per share and has a dividend yield of 2.8%. Stanley Black & Decker pays an annual dividend of $3.28 per share and has a dividend yield of 4.8%. Amada pays out 46.9% of its earnings in the form of a dividend. Stanley Black & Decker pays out 136.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Stanley Black & Decker has raised its dividend for 58 consecutive years. Stanley Black & Decker is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Amada and Stanley Black & Decker”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amada	$2.60 billion	1.35	$213.75 million	$2.60	16.51
Stanley Black & Decker	$15.37 billion	0.69	$286.30 million	$2.41	28.47

Stanley Black & Decker has higher revenue and earnings than Amada. Amada is trading at a lower price-to-earnings ratio than Stanley Black & Decker, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Amada and Stanley Black & Decker’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amada	8.17%	6.11%	4.88%
Stanley Black & Decker	2.40%	7.85%	3.09%

Institutional & Insider Ownership

87.8% of Stanley Black & Decker shares are owned by institutional investors. 0.7% of Stanley Black & Decker shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Stanley Black & Decker beats Amada on 12 of the 17 factors compared between the two stocks.

About Amada

Amada Co., Ltd., together with its subsidiaries, manufactures, sells, leases, repairs, maintains, checks, and inspects metalworking machinery, software, and peripheral equipment in Japan, North America, Europe, Asia, and internationally. It offers sheet metal fabrication machines, including laser machines, punch and laser combination machines, turret punch presses, press brakes, bending robots, and welders, as well as software solutions; general fabrication machines, such as shearing and deburring machines, corner shear, iron worker, AMS SPACE series, horizontal benders, tapping and fastener insertion machines, and environment related products; cutting fluids, lubricants, and other consumables; and a range of tools for bending and punching. The company also provides metal cutting machines, such as hyper saw, pulse cutting band saw, automatic and semi-automatic general-purpose band saw, vertical band saw, circular saw, and other machines; structural steel machines; grinding machines; and band saw blades and circular saw blades that are used for metal cutting machines. In addition, it offers precision welding machines, including laser welders and markers, resistance welders, and systems for use in automobile parts, electronic components, and medical instruments. Further, the company provides consumables, and tooling equipment. Additionally, it offers stamping presses and stamping press equipment, and spring machines. The company was formerly known as Amada Holdings Co., Ltd. Amada Co., Ltd. was founded in 1946 and is headquartered in Isehara, Japan.

About Stanley Black & Decker

Stanley Black & Decker, Inc. engages in the provision of power and hand tools, and related accessories, products, services and equipment for oil and gas, infrastructure applications, commercial electronic security and monitoring systems, healthcare solutions, and mechanical access solutions. It operates through the Tools and Outdoor and Industrial segments. The Tools and Outdoor segment refers to power tools, hand tools, accessories and storage, and outdoor power equipment product lines. The Industrial segment includes the engineered fastening and infrastructure businesses. The company was founded by Frederick T. Stanley in 1843 and is headquartered in New Britain, CT.