Murata Manufacturing (OTCMKTS:MRAAY) and A. O. Smith (NYSE:AOS) Head-To-Head Comparison

Murata Manufacturing (OTCMKTS:MRAAY) and A. O. Smith (NYSE:AOS) are both large-cap industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Institutional and Insider Ownership

0.8% of Murata Manufacturing shares are owned by institutional investors. Comparatively, 76.1% of A. O. Smith shares are owned by institutional investors. 0.8% of A. O. Smith shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Murata Manufacturing and A. O. Smith”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Murata Manufacturing	$11.45 billion	2.77	$1.54 billion	$0.39	21.81
A. O. Smith	$3.82 billion	2.67	$533.60 million	$3.59	20.23

Murata Manufacturing has higher revenue and earnings than A. O. Smith. A. O. Smith is trading at a lower price-to-earnings ratio than Murata Manufacturing, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Murata Manufacturing and A. O. Smith, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Murata Manufacturing	0	0	0	0	0.00
A. O. Smith	0	5	2	0	2.29

A. O. Smith has a consensus target price of $77.43, suggesting a potential upside of 6.62%. Given A. O. Smith’s stronger consensus rating and higher probable upside, analysts clearly believe A. O. Smith is more favorable than Murata Manufacturing.

Volatility and Risk

Murata Manufacturing has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, A. O. Smith has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Dividends

Murata Manufacturing pays an annual dividend of $0.14 per share and has a dividend yield of 1.6%. A. O. Smith pays an annual dividend of $1.36 per share and has a dividend yield of 1.9%. Murata Manufacturing pays out 35.9% of its earnings in the form of a dividend. A. O. Smith pays out 37.9% 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. A. O. Smith has raised its dividend for 31 consecutive years. A. O. Smith is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Murata Manufacturing and A. O. Smith’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Murata Manufacturing	12.51%	8.51%	7.28%
A. O. Smith	13.68%	28.42%	16.52%

Summary

A. O. Smith beats Murata Manufacturing on 12 of the 17 factors compared between the two stocks.

About Murata Manufacturing

Murata Manufacturing Co., Ltd. designs, manufactures, and sells ceramic-based passive electronic components and solutions in Japan and internationally. The company offers capacitors, inductors, noise suppression products/EMI suppression filters/ESD protection devices, resistors, thermistors, sensors, timing devices, quartz devices, sound components, power products, batteries, micro mechatronics, RFID product, baluns, couplers, filters, phase shifters, RF switches, front-end modules, SAW components, connectors, antennas, connectivity modules, wireless connectivity platforms, ionizers/active oxygen modules, and transformers. It also offers Femtet, a CAE software that solves various engineering challenges; and provides silver oxide battery. In addition, the company provides connectivity, Wifi sensing, IOT, AI, and RFID solutions. Murata Manufacturing Co., Ltd. offers its products for use in communications equipment, mobility, enterprise system, industrial, healthcare, medical, personal electronics applications, and other sectors. The company was founded in 1944 and is headquartered in Nagaokakyo, Japan.

About A. O. Smith

A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products in North America, China, Europe, and India. The company offers water heaters for residences, restaurants, hotels, office buildings, laundries, car washes, and small businesses; boilers for hospitals, schools, hotels, and other large commercial buildings, as well as homes, apartments, and condominiums; and water treatment products comprising point-of-entry water softeners, well water solutions, and whole-home water filtration products, and point-of-use carbon and reverse osmosis products for residences, restaurants, hotels, and offices. It also provides commercial water treatment and filtration product; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and electric wall-hung, gas tankless, combi-boiler, and heat pump and solar water heaters. The company offers its products under the A. O. Smith, State, Lochinvar, Hague, Water-Right, Master Water, Atlantic Filter, and Water Tec brands. It distributes its products through independent wholesale plumbing distributors, as well as to retail channels consisting of hardware and home center chains, and manufacturer representative firms; and offers Aquasana branded products directly to consumers through e-commerce channels. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.