Critical Review: Ituran Location and Control (NASDAQ:ITRN) vs. Assa Abloy (OTCMKTS:ASAZY)

Assa Abloy (OTCMKTS:ASAZY) and Ituran Location and Control (NASDAQ:ITRN) are both industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.

Dividends

Assa Abloy pays an annual dividend of $0.18 per share and has a dividend yield of 1.0%. Ituran Location and Control pays an annual dividend of $2.00 per share and has a dividend yield of 5.5%. Assa Abloy pays out 25.4% of its earnings in the form of a dividend. Ituran Location and Control pays out 71.7% 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. Ituran Location and Control has increased its dividend for 4 consecutive years. Ituran Location and Control is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Assa Abloy and Ituran Location and Control, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Assa Abloy	0	2	1	0	2.33
Ituran Location and Control	0	0	2	0	3.00

Ituran Location and Control has a consensus price target of $50.00, indicating a potential upside of 36.35%. Given Ituran Location and Control’s stronger consensus rating and higher possible upside, analysts clearly believe Ituran Location and Control is more favorable than Assa Abloy.

Insider and Institutional Ownership

94.8% of Ituran Location and Control shares are owned by institutional investors. 0.0% of Ituran Location and Control 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.

Profitability

This table compares Assa Abloy and Ituran Location and Control’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Assa Abloy	9.57%	14.54%	6.81%
Ituran Location and Control	16.35%	28.24%	16.47%

Risk and Volatility

Assa Abloy has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Ituran Location and Control has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Valuation and Earnings

This table compares Assa Abloy and Ituran Location and Control”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Assa Abloy	$14.20 billion	2.82	$1.48 billion	$0.71	25.36
Ituran Location and Control	$339.61 million	2.15	$53.65 million	$2.79	13.14

Assa Abloy has higher revenue and earnings than Ituran Location and Control. Ituran Location and Control is trading at a lower price-to-earnings ratio than Assa Abloy, indicating that it is currently the more affordable of the two stocks.

Summary

Ituran Location and Control beats Assa Abloy on 11 of the 17 factors compared between the two stocks.

About Assa Abloy

ASSA ABLOY AB (publ) provides door opening and access products, solutions, and services for the institutional, commercial, and residential markets in Europe, the Middle East, India, Africa, North and South America, Asia, and Oceania. The company provides digital access solutions, such as electronic access control ecosystem, wireless solutions, electronic key solutions, standalone access solutions, and wired solutions; swing, revolving, and sliding doors; mechanical products, including hinges, lever handles, mortise lockcases, euro profile cylinders, panic exit devices, door closers, floor spring, and general hardware; and doors. It offers Openings Studio, a building information modeling software ecosystem is collaboration tool for designing, documenting, and managing openings. The company provides its products primarily under the ASSA ABLOY, Yale, and HID brands. It sells its products through distributors and wholesalers. The company serves aviation, education, distribution and logistics, entertainment and public facility, finance and banking, government and military, healthcare, hospitality, manufacturing, mining, office and enterprise, homes and residence, retail, shipyards, and transportation industries. ASSA ABLOY AB (publ) was incorporated in 1954 and is based in Stockholm, Sweden.

About Ituran Location and Control

Ituran Location and Control Ltd., together with its subsidiaries, provides location based telematics services and machine-to-machine telematics products. It operates through two segments, Telematics Services and Telematics Products. The Telematics services segment offers stolen vehicle recovery and tracking services, which enables to locate, track, and recover stolen vehicles for its subscribers; fleet management services that enable corporate and individual customers to track and manage their vehicles in real time; and locator services that allow customers to protect valuable merchandise and equipment. This segment also delivers on-demand navigation guidance, information, and assistance, including the provision of traffic reports and directions, as well as information on the location of gas stations, car repair shops, post offices, hospitals, and other facilities; and Connected Car, a service platform that includes a back-office application, a telematics device installed in the vehicle, mobile apps for IOS and Android users, and interface using the car infotainment screen, as well as usage based insurance and auto financing services. This segment serves insurance companies and agents, car manufacturers, dealers and importers, cooperative sales channels, and private subscribers. The Telematics Products segment offers Base Site, a radio receiver that includes a processor and a data computation unit to collect and send data to and from transponders, and to control centers; Control Center, a center consisting of software used to collect data from various base sites, conduct location calculations, and transmit location data to various customers and law enforcement agencies; navigation and tracking devices installed in vehicles; and SMART, a portable transmitter installed in vehicles that sends a signal to the base site enabling the location of vehicles, equipment, or an individual. The company was incorporated in 1994 and is headquartered in Azor, Israel.